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SITE Centers
SITC
#7844
Rank
$0.33 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$6.39
Share price
1.75%
Change (1 day)
-57.09%
Change (1 year)
๐Ÿ  Real estate๐Ÿ’ฐ Investment ๐Ÿ˜๏ธ REITs
Categories
  1. SITE Centers
  2. Annual Reports (10-K)
  3. Submitted on 2009-02-27

SITE Centers - 10-K annual report


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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
FORM 10-K
 
   
(Mark One)
  
þ
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
OR
o
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from               to               
 
Commission file number 1-11690
DEVELOPERS DIVERSIFIED REALTY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
 
   
Ohio 34-1723097
 
(State or Other Jurisdiction
of Incorporation or Organization)
 (I.R.S. Employer Identification No.)
 
3300 Enterprise Parkway, Beachwood, Ohio 44122
(Address of Principal Executive Offices — Zip Code)
 
(216) 755-5500
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
 
   
Title of Each Class
 Name of Each Exchange on Which Registered
 
Common Shares, Without Par Value
 New York Stock Exchange
Depositary Shares Representing
Class G Cumulative Redeemable Preferred Shares
 New York Stock Exchange
Depositary Shares Representing
Class H Cumulative Redeemable Preferred Shares
 New York Stock Exchange
Depositary Shares Representing
Class I Cumulative Redeemable Preferred Shares
 New York Stock Exchange
 
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o     No þ
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-Kis not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of thisForm 10-Kor any amendment to thisForm 10-K.  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” inRule 12b-2of the Exchange Act. (Check one):
 
       
Large accelerated filer þ
 Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company)		 Smaller reporting company o
 
Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2of the Exchange Act).  Yes o     No þ
 
The aggregate market value of the voting stock held by non-affiliates of the registrant at June 30, 2008 was $4.0 billion.
 
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
 
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
 
129,285,114 common shares outstanding as of February 13, 2009
 
DOCUMENTS INCORPORATED BY REFERENCE
 
The registrant incorporates by reference in Part III hereof portions of its definitive Proxy Statement for its 2009 Annual Meeting of Shareholders.
 

Table of Contents

 
TABLE OF CONTENTS
 
         
    Report
Item No.
   Page
 
PART I
 
1.
  
Business
  3 
 
1A.
  
Risk Factors
  6 
 
1B.
  
Unresolved Staff Comments
  14 
 
2.
  
Properties
  14 
 
3.
  
Legal Proceedings
  76 
 
4.
  
Submission of Matters to a Vote of Security Holders
  76 
 
PART II
 
5.
  
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  79 
 
6.
  
Selected Financial Data
  81 
 
7.
  
Management’s Discussion and Analysis of Financial Condition and Results of Operations
  84 
 
7A.
  
Quantitative and Qualitative Disclosures about Market Risk
  142 
 
8.
  
Financial Statements and Supplementary Data
  144 
 
9.
  
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  144 
 
9A.
  
Controls and Procedures
  144 
 
9B.
  
Other Information
  145 
 
PART III
 
10.
  
Directors, Executive Officers and Corporate Governance
  146 
 
11.
  
Executive Compensation
  146 
 
12.
  
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
  146 
 
13.
  
Certain Relationships and Related Transactions, and Director Independence
  147 
 
14.
  
Principal Accounting Fees and Services
  147 
 
PART IV
 
15.
  
Exhibits, Financial Statement Schedules
  147 


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PART I
 
Item 1.  BUSINESS
 
General Development of Business
 
Developers Diversified Realty Corporation, an Ohio corporation (the “Company” or “DDR”), a self-administered and self-managed real estate investment trust (a “REIT”), is in the business of acquiring, developing, redeveloping, owning, leasing and managing shopping centers and, to a lesser extent, business centers. Unless otherwise provided, references herein to the Company or DDR include Developers Diversified Realty Corporation, its wholly-owned and majority-owned subsidiaries and its consolidated and unconsolidated joint ventures.
 
From January 1, 2004 to December 31, 2008, the Company and its unconsolidated joint ventures acquired 512 shopping center properties. The Company acquired 11 properties in 2008, all of which were acquired through unconsolidated joint ventures, 317 properties in 2007 (including 315 shopping centers acquired through the merger with Inland Retail Real Estate Trust, Inc. (“IRRETI”), of which 66 were held by an unconsolidated joint venture of IRRETI and two additional shopping centers acquired through unconsolidated joint ventures), 20 properties in 2006 (including 15 acquired through joint ventures and four by acquiring its unconsolidated joint venture partners’ interests), 52 properties in 2005 (including 36 acquired through a consolidated joint venture and one by acquiring its unconsolidated joint venture partner’s interest) and 112 properties in 2004 (including 18 acquired through unconsolidated joint ventures and one by acquiring its unconsolidated joint venture partner’s interest). Of the 15 properties acquired through unconsolidated joint ventures in 2006, nine properties are located in Brazil.
 
The Company files annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). You may read and copy any document the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, N.W., Washington, D.C. 20549. You may obtain information about the operation of the SEC’s Public Reference Room by calling the SEC at1-800-SEC-0330.The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC(http://www.sec.gov).
 
You can inspect reports and other information that the Company files with the New York Stock Exchange at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
 
The Company’s corporate office is located at 3300 Enterprise Parkway, Beachwood, Ohio 44122, and its telephone number is(216) 755-5500.The Company’s website is located athttp://www.ddr.com.On its website, you can obtain a copy of the Company’s annual reports onForm 10-K,quarterly reports onForm 10-Q,current reports onForm 8-Kand amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended, as soon as reasonably practicable after the Company files such material electronically with, or furnishes it to, the SEC. A copy of these filings is available to all interested parties upon written request to Francine Glandt, Vice President of Capital Markets and Treasurer, at the Company’s corporate office.
 
Financial Information About Industry Segments
 
The Company is in the business of acquiring, developing, redeveloping, owning, leasing and managing shopping centers and, to a lesser extent, business centers. See the Consolidated Financial Statements and Notes thereto included in Item 15 of this Annual Report onForm 10-Kfor certain information regarding the Company’s reportable segments, which is incorporated herein by reference.
 
Narrative Description of Business
 
The Company’s portfolio as of February 13, 2009, consisted of 696 shopping centers and six business centers (including 329 centers owned through unconsolidated joint ventures and 35 centers that are otherwise consolidated by the Company) and more than 2,000 acres of undeveloped land (of which approximately 700 acres are owned through unconsolidated joint ventures) (together the “Portfolio Properties”). The shopping center properties consist of shopping centers, enclosed malls and lifestyle centers. From January 1, 2006 to February 13, 2009, the Company acquired 348 shopping centers (including 94 properties owned through unconsolidated joint ventures) containing


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an aggregate of approximately 42.4 million square feet of gross leasable area (“GLA”) owned by the Company, for an aggregate purchase price of approximately $9.3 billion.
 
As of February 13, 2009, the Company was expanding three wholly-owned properties and three of its unconsolidated joint venture properties. As of December 31, 2008, the Company had ten wholly-owned shopping centers under development and redevelopment.
 
At December 31, 2008, the aggregate occupancy of the Company’s shopping center portfolio was 92.1%, as compared to 94.9% at December 31, 2007. The Company owned 702 shopping centers at December 31, 2008, as compared to 710 shopping centers at December 31, 2007. The average annualized base rent per occupied square foot was $12.33 at December 31, 2008, as compared to $12.24 at December 31, 2007. The decrease in the occupancy is primarily a result of the deteriorating economic environment and increased tenant bankruptcies.
 
At December 31, 2008, the aggregate occupancy of the Company’s wholly-owned shopping centers was 90.7%, as compared to 93.9% at December 31, 2007. The Company owned 333 wholly-owned shopping centers at December 31, 2008, as compared to 353 shopping centers at December 31, 2007. The average annualized base rent per leased square foot was $11.74 at December 31, 2008, as compared to $11.53 at December 31, 2007. The decrease in the occupancy is primarily a result of the deteriorating economic environment and increased tenant bankruptcies.
 
At December 31, 2008, the aggregate occupancy rate of the Company’s joint venture shopping centers was 93.4%, as compared to 95.9% at December 31, 2007. The Company’s joint ventures owned 369 shopping centers including 40 consolidated centers primarily owned through a consolidated joint venture at December 31, 2008, as compared to 357 shopping centers including 40 consolidated centers at December 31, 2007. The average annualized base rent per leased square foot was $12.85 at December 31, 2008, as compared to $12.86 at December 31, 2007. The decrease in the occupancy is primarily a result of the deteriorating economic environment and increased tenant bankruptcies.
 
At December 31, 2008, the aggregate occupancy of the Company’s business centers was 72.4%, as compared to 70.0% at December 31, 2007. The business centers consist of six assets in four states at December 31, 2008. The business centers consisted of seven assets in five states at December 31, 2007.
 
The Company is self-administered and self-managed and, therefore, does not engage or pay a REIT advisor. The Company manages all of the Portfolio Properties. At December 31, 2008, the Company ownedand/ormanaged more than 117.6 million square feet of Company-owned GLA, which included all of the Portfolio Properties and one property owned by a third party.
 
Strategy and Philosophy
 
The Company’s mission is to enhance shareholder value by exceeding the expectations of its customers, innovating to create new growth opportunities and fostering the talents of its employees while rewarding their successes. The Company’s vision is to be the most admired provider of retail destinations and the first consideration for customers, investors, partners and employees.
 
The Company’s investment objective is to increase cash flow and the value of its Portfolio Properties. In addition, the Company may pursue the disposition of certain real estate assets and utilize the proceeds to repay debt, to reinvest in other real estate assets and developments or for other corporate purposes. The Company’s real estate strategy and philosophy has been to grow its business through a combination of leasing, expansion, acquisition, development and redevelopment. In response to the unprecedented events that have recently taken place within the economic environment and in the capital markets, the Company has refined its strategies in order to mitigate risk and focus on core operating results. These refined strategies are, as described below, to highlight the quality of the core portfolio and dispose of those properties that are not likely to generate superior growth, to reduce leverage by utilizing strategic financial measures and to protect the Company’s long-term financial strength.


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Our refined strategies are summarized as follows:
 
  • Increase cash flows and property values through strategic leasing, re-tenanting, renovation and expansion of the Company’s portfolio to be the preeminent landlord to the world’s most successful retailers;
 
  • Address its capital requirements through asset sales, including sales to joint ventures, retained capital, reduce 2009 dividend payments to the amount required to meet minimum REIT requirements, pursue extension of existing loan facilities and enter into new financings, and, to the extent deemed appropriate, minimize further capital expenditures;
 
  • Access equity capital through the public markets and other viable alternatives;
 
  • Reduce expected spending within the Company’s development and redevelopment portfolios by phasing construction until sufficient pre-leasing is reached and financing is in place;
 
  • Selectively pursue new investment opportunities only after significant equity and debt financings are identified and underwritten expected returns sufficiently exceed the Company’s current cost of capital;
 
  • Pursue only those projects that meet the Company’s pre-leasing thresholds or other thresholds necessary to secure third-party construction financingand/or the Company’s return thresholds;
 
  • Continue its leasing strategy of growing tenant relationships at high level through its national account program and to increase occupancy with high-quality tenants;
 
  • Renew tenants’ extension options and execute leases in a more timely fashion;
 
  • Dedicate Company resources to monitor tenant bankruptcies, identify potential space recapture and focus on marketing and re-tenanting those spaces;
 
  • Increase per share cash flows through the strategic disposition of non-core assets and utilize the proceeds to repay debt and invest in other higher growth real estate assets and developments;
 
  • Selectively develop or sell the Company’s undeveloped parcels or new sites in areas with attractive demographics;
 
  • Hold properties for long-term investment and place a strong emphasis on regular maintenance, periodic renovation and capital improvements;
 
  • Continue to manage and develop the properties of others to generate fee income, subject to restrictions imposed by federal income tax laws and
 
  • Explore international markets and selectively invest where the greatest value creation opportunities exist.
 
At December 31, 2008, the Company’s capitalization, excluding the Company’s proportionate share of indebtedness of its unconsolidated joint ventures, consisted of $5.9 billion of debt, $555 million of preferred shares and $0.6 billion of market equity (market equity is defined as common shares and Operating Partnership Units (“OP Units”) outstanding, multiplied by $4.88, the closing price of the common shares on the New York Stock Exchange at December 31, 2008), resulting in a debt to total market capitalization ratio of 0.83 to 1.0, as compared to the ratios of 0.52 to 1.0 and 0.36 to 1.0 at December 31, 2007 and 2006, respectively. The decrease in the Company’s share price as well as the current economic environment and constraints in the capital markets have caused this ratio to deteriorate at December 31, 2008. The current economic environment and related impact in the market price of the Company’s common shares have caused this ratio to vary. At December 31, 2008, the Company’s total debt consisted of $4.4 billion of fixed-rate debt and $1.5 billion of variable-rate debt, including $600 million of variable-rate debt that had been effectively swapped to a fixed rate. At December 31, 2007, the Company’s total debt consisted of $4.5 billion of fixed-rate debt and $1.1 billion of variable-rate debt, including $600 million of variable-rate debt that had been effectively swapped to a fixed rate.
 
The strategy, philosophy, investment and financing policies of the Company, and its policies with respect to certain other activities including its growth, debt capitalization, distributions, status as a REIT and operating


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policies, are determined by the Board of Directors. Although the Board of Directors has no present intention to amend or revise its policies, the Board of Directors may do so from time to time without a vote of the Company’s shareholders.
 
Recent Developments
 
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 and the Consolidated Financial Statements and Notes thereto included in Item 15 of this Annual Report onForm 10-Kfor information on certain of the recent developments, which is incorporated herein.
 
Competition
 
As one of the nation’s largest owners and developers of shopping centers (measured by total GLA) the Company has established close relationships with a large number of major national and regional retailers. The Company’s management is associated with and actively participates in many shopping center and REIT industry organizations.
 
Notwithstanding these relationships, numerous developers and real estate companies, private and public, compete with the Company in leasing space in these properties to tenants. In addition, tenants have been more selective in new store openings which is expected to tighten the demand for new space.
 
Employees
 
As of February 13, 2009, the Company employed 768 full-time individuals, including executive, administrative and field personnel. The Company considers its relations with its personnel to be good.
 
Qualification as a Real Estate Investment Trust
 
As of December 31, 2008, the Company met the qualification requirements of a REIT underSections 856-860of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, the Company, with the exception of its taxable REIT subsidiary, will not be subject to federal income tax to the extent it meets certain requirements of the Code.
 
Item 1A.  RISK FACTORS
 
The risks described below could materially and adversely affect the Company’s results of operations, financial condition, liquidity and cash flows. These risks are not the only risks that the Company faces. The Company’s business operations could also be affected by additional factors that are not presently known to it or that the Company currently considers to be immaterial to its operations.
 
The Economic Performance and Value of the Company’s Shopping Centers Depend on Many Factors, Each of Which Could Have an Adverse Impact on the Center’s Cash Flows and Operating Results
 
The economic performance and value of the Company’s real estate holdings can be affected by many factors, including the following:
 
  • Changes in the national, regional and local economic climate;
 
  • Local conditions, such as an oversupply of space or a reduction in demand for real estate in the area;
 
  • The attractiveness of the properties to tenants;
 
  • Competition from other available space;
 
  • The Company’s ability to provide adequate management services and to maintain its properties;
 
  • Increased operating costs, if these costs cannot be passed through to tenants, and
 
  • The expense of periodically renovating, repairing and reletting spaces.


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The Company’s properties consist primarily of community shopping centers, therefore, the Company’s performance is linked to general economic conditions in the market for retail space. The market for retail space has been and may continue to be adversely affected by weakness in the national, regional and local economies, the adverse financial condition of some large retailing companies, the ongoing consolidation in the retail sector, the excess amount of retail space in a number of markets and increasing consumer purchases through catalogs and the Internet. To the extent that any of these conditions occur, they are likely to affect market rents for retail space. In addition, the Company may face challenges in the management and maintenance of its properties or incur increased operating costs, such as real estate taxes, insurance and utilities, which may make its properties unattractive to tenants. The loss of rental revenues from a number of the Company’s tenants and its inability to replace such tenants may adversely affect the Company’s profitability and ability to meet its debt and other financial obligations and make distributions to shareholders.
 
The Company’s Dependence on Rental Income May Adversely Affect Its Ability to Meet Its Debt Obligations and Make Distributions to the Shareholders
 
Substantially all of the Company’s income is derived from rental income from real property. As a result, the Company’s performance depends on its ability to collect rent from tenants. The Company’s income and funds for distribution would be negatively affected if a significant number of its tenants, or any of its major tenants were to:
 
  • Experience a downturn in their business that significantly weakens their ability to meet their obligations to the Company;
 
  • Delay lease commencements;
 
  • Decline to extend or renew leases upon expiration;
 
  • Fail to make rental payments when due or
 
  • Close stores or declare bankruptcy.
 
Any of these actions could result in the termination of tenants’ leases and the loss of rental income attributable to the terminated leases. Lease terminations by an anchor tenant or a failure by that anchor tenant to occupy the premises could also result in lease terminations or reductions in rent by other tenants in the same shopping centers under the terms of some leases. In addition, the Company cannot be certain that any tenant whose lease expires will renew that lease or that it will be able to re-lease space on economically advantageous terms. The loss of rental revenues from a number of the Company’s tenants and its inability to replace such tenants may adversely affect the Company’s profitability and its ability to meet debt and other financial obligations and make distributions to shareholders.
 
The Company Relies on Major Tenants, Making It Vulnerable to Changes in the Business and Financial Condition of, or Demand for Its Space, by Such Tenants
 
As of December 31, 2008, the annualized base rental revenues from Wal-Mart, T.J. Maxx, Mervyns, Lowe’s Home Improvement, PetSmart, Bed Bath & Beyond and Circuit City represented 4.3%, 2.1%, 1.9%, 1.9%, 1.9%, 1.6% and 1.6%, respectively, of the Company’s aggregate annualized shopping center base rental revenues (those tenants greater than 1.5%), including its proportionate share of joint venture aggregate annualized shopping center base rental revenues. Mervyns and Circuit City filed for bankruptcy protection in 2008.
 
The retail shopping sector has been affected by economic conditions, as well as the competitive nature of the retail business and the competition for market share where stronger retailers have out-positioned some of the weaker retailers. These shifts have forced some market share away from weaker retailers and required them, in some cases, to declare bankruptcyand/or close stores. For example, in 2008 and the first two months of 2009, certain retailers filed for bankruptcy protection and other retailers have announced store closings even though they have not filed for bankruptcy protection. As information becomes available regarding the status of the Company’s leases with tenants in financial distress or the future plans for their spaces change, the Company may be required to write offand/oraccelerate depreciation and amortization expense associated with a significant portion of the tenant related deferred charges in future periods. The Company’s income and ability to meet its financial obligations could also be


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adversely affected in the event of the bankruptcy, insolvency or significant downturn in the business of one of these tenants or any of the Company’s other major tenants. In addition, the Company’s results could be adversely affected if any of these tenants do not renew multiple lease terms as they expire.
 
The Company’s Acquisition Activities May Not Produce the Cash Flows That It Expects and May Be Limited by Competitive Pressures or Other Factors
 
The Company intends to acquire existing retail properties only to the extent that suitable acquisitions can be made on advantageous terms. Acquisitions of commercial properties entail risks, such as:
 
  • The Company’s estimates on expected occupancy and rental rates may differ from actual conditions;
 
  • The Company’s estimates of the costs of any redevelopment or repositioning of acquired properties may prove to be inaccurate;
 
  • The Company may be unable to operate successfully in new markets where acquired properties are located, due to a lack of market knowledge or understanding of local economies;
 
  • The Company may be unable to successfully integrate new properties into its existing operations or
 
  • The Company may have difficulty obtaining financing on acceptable terms or paying the operating expenses and debt service associated with acquired properties prior to sufficient occupancy.
 
In addition, the Company may not be in a position or have the opportunity in the future to make suitable property acquisitions on advantageous terms due to competition for such properties with others engaged in real estate investment who may have greater financial resources than the Company. The Company’s inability to successfully acquire new properties may affect the Company’s ability to achieve its anticipated return on investment, which could have an adverse effect on its results of operations.
 
The Company’s Articles of Incorporation Contain Limitations on Acquisitions and Changes in Control
 
In order to maintain the Company’s status as a REIT, its Articles of Incorporation prohibit any person, except for certain existing shareholders at the time of its initial public offering, from owning more than 5% of the Company’s outstanding common shares. This restriction is likely to discourage third parties from acquiring control of the Company without consent of its Board of Directors even if a change in control was in the best interests of shareholders.
 
Real Estate Property Investments Are Illiquid; Therefore the Company May Not Be Able to Dispose of Properties When Appropriate or on Favorable Terms
 
Real estate investments generally cannot be disposed of quickly. In addition, the federal tax code imposes restrictions, which are not applicable to other types of real estate companies, on the ability of a REIT to dispose of properties. Therefore, the Company may not be able to diversify its portfolio in response to economic or other conditions promptly or on favorable terms, which could cause the Company to incur losses and reduce its cash flows and adversely affect distributions to shareholders.
 
The Company’s Development and Construction Activities Could Affect Its Operating Results
 
The Company intends to continue the selective development and construction of retail properties in accordance with its development underwriting policies as opportunities arise. The Company’s development and construction activities include risks that:
 
  • The Company may abandon development opportunities after expending resources to determine feasibility;
 
  • Construction costs of a project may exceed the Company’s original estimates;
 
  • Occupancy rates and rents at a newly completed property may not be sufficient to make the property profitable;


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  • Rental rates per square foot could be less than projected;
 
  • Financing may not be available to the Company on favorable terms for development of a property;
 
  • The Company may not complete construction andlease-up on schedule, resulting in increased debt service expense and construction costs, and
 
  • The Company may not be able to obtain, or may experience delays in obtaining, necessary zoning, land use, building, occupancy and other required governmental permits and authorizations.
 
Additionally, the time frame required for development, construction andlease-up of these properties means that the Company may wait several years for a significant cash return. If any of the above events occur, the development of properties may hinder the Company’s growth and have an adverse effect on its results of operations and cash flows. In addition, new development activities, regardless of whether or not they are ultimately successful, typically require substantial time and attention from management.
 
The Company Has Variable-Rate Debt and Is Subject to Interest Rate Risk
 
The Company has a substantial amount of mortgage debt with interest rates that vary depending upon the market index. In addition, the Company has revolving credit facilities that bear interest at a variable rate on any amounts drawn on the facilities. The Company may incur additional variable-rate debt in the future. Increases in interest rates on variable-rate debt would increase the Company’s interest expense, which would negatively affect net earnings and cash available for payment of its debt obligations and distributions to its shareholders.
 
The Company’s Ability to Increase Its Debt Could Adversely Affect Its Cash Flow
 
At December 31, 2008, the Company had outstanding debt of approximately $5.9 billion (excluding its proportionate share of unconsolidated joint venture mortgage debt aggregating $1.2 billion). The Company intends to maintain a strategy of conservative ratio of debt to total market capitalization (the sum of the aggregate market value of the Company’s common shares, the liquidation preference on any preferred shares outstanding and its total indebtedness). The Company is subject to limitations under its credit facilities and indentures relating to its ability to incur additional debt; however, the Company’s organizational documents do not contain any limitation on the amount or percentage of indebtedness it may incur. If the Company were to become more highly leveraged, its cash needs to fund debt service would increase accordingly. Under such circumstances, the Company’s risk of decreases in cash flow, due to fluctuations in the real estate market, reliance on its major tenants, acquisition and development costs and the other factors discussed above, could subject the Company to an even greater adverse impact on its financial condition and results of operations. In addition, increased leverage could increase the risk of default on the Company’s debt obligations, which could further reduce its cash available for distribution and adversely affect its ability to dispose of its portfolio on favorable terms, which could cause the Company to incur losses and reduce its cash flows.
 
Recent Disruptions in the Financial Markets Could Affect the Company’s Ability To Obtain Financing on Reasonable Terms and Have Other Adverse Effects on the Company and the Market Price of the Company’s Common Shares
 
The U.S. and global equity and credit markets have recently experienced significant price volatility, dislocations and liquidity disruptions, which have caused market prices of many stocks to fluctuate substantially and the spreads on prospective debt financings to widen considerably. These circumstances have materially impacted liquidity in the financial markets, making terms for certain financings less attractive, and in certain cases resulting in the unavailability of certain types of financing. Continued uncertainty in the equity and credit markets may negatively impact the Company’s ability to access additional financing at reasonable terms or at all, which may negatively affect the Company’s ability to refinance its debt, obtain construction financing or make acquisitions. These circumstances may also adversely affect the Company’s tenants, including their ability to enter into new leases, pay their rents when due and renew their leases at rates at least as favorable as their current rates. A prolonged downturn in the equity or credit markets may cause the Company to seek alternative sources of potentially less attractive financing, and may require it to adjust its business plan accordingly. In addition, these factors may make it more difficult for the Company to sell


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properties or may adversely affect the price it receives for properties that it does sell, as prospective buyers may experience increased costs of financing or difficulties in obtaining financing. These events in the equity and credit markets may make it more difficult or costly for the Company to raise capital through the issuance of its common shares. These disruptions in the financial markets also may have a material adverse effect on the market value of the Company’s common shares and other adverse effects on it or the economy in general. There can be no assurances that government responses to the disruptions in the financial markets will restore consumer confidence, stabilize the markets or increase liquidity and the availability of equity or credit financing.
 
Changes in the Company’s Credit Ratings or the Debt Markets, as well as Recent Market Conditions in the Credit Markets, Could Adversely Affect the Company’s Publicly Traded Debt and Revolving Credit Facilities
 
The market value for the Company’s publicly held debt depends on many factors, including:
 
  • The Company’s credit ratings with major credit rating agencies;
 
  • The prevailing interest rates being paid by, or the market price for publicly traded debt issued by, other companies similar to the Company;
 
  • The Company’s financial condition, liquidity, leverage, financial performance and prospects and
 
  • The overall condition of the financial markets.
 
The condition of the financial markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future. The U.S. credit markets and the sub-prime residential mortgage market have recently experienced severe dislocations and liquidity disruptions. There has been a substantial widening of yield spreads generally, as buyers demand greater compensation for credit risk. In addition, there has been a reduction in the availability of capital for some issuers of debt due to the decrease in the number of available lenders and decreased willingness of lenders to offer capital at cost efficient rates. Furthermore, current market conditions can be exacerbated by leverage. The continuation of these circumstances in the credit marketsand/oradditional fluctuations in the financial markets and prevailing interest rates could have an adverse effect on the Company’s ability to access capital and its cost of capital.
 
In addition, credit rating agencies continually review their ratings for the companies that they follow, including the Company. The credit rating agencies also evaluate the real estate industry as a whole and may change their credit rating for the Company based on their overall view of the industry. A negative change in the Company’s rating could have an adverse effect on the Company’s publicly traded debt and revolving credit facilities as well as the Company’s ability to access capital and its cost of capital.
 
The Company’s Cash Flows and Operating Results Could Be Adversely Affected by Required Payments of Debt or Related Interest and Other Risks of Its Debt Financing
 
The Company is generally subject to the risks associated with debt financing. These risks include:
 
  • The Company’s cash flow may not satisfy required payments of principal and interest;
 
  • The Company may not be able to refinance existing indebtedness on its properties as necessary, or the terms of the refinancing may be less favorable to the Company than the terms of existing debt;
 
  • Required debt payments are not reduced if the economic performance of any property declines;
 
  • Debt service obligations could reduce funds available for distribution to the Company’s shareholders and funds available for development and acquisitions;
 
  • Any default on the Company’s indebtedness could result in acceleration of those obligations and possible loss of property to foreclosure and
 
  • Necessary capital expenditures for purposes such as re-leasing space cannot be financed on favorable terms.


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If a property is mortgaged to secure payment of indebtedness and the Company cannot make the mortgage payments, it may have to surrender the property to the lender with a consequent loss of any prospective income and equity value from such property. Any of these risks can place strains on the Company’s cash flows, reduce its ability to grow and adversely affect its results of operations.
 
The Company’s Financial Condition Could Be Adversely Affected by Financial Covenants
 
The Company’s credit facilities and the indentures under which its senior and subordinated unsecured indebtedness is, or may be, issued contain certain financial and operating covenants, including, among other things, leverage ratios, certain coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of its assets and engage in mergers and consolidations and certain acquisitions. These credit facilities and indentures also contain customary default provisions including the failure to timely pay principal and interest issued thereunder, the failure to comply with our financial and operating covenants, the occurrence of a material adverse effect on the Company, and the failure to pay when due any other Company consolidated indebtedness (including non-recourse obligations) in excess of $50 million. These covenants could limit the Company’s ability to obtain additional funds needed to address cash shortfalls or pursue growth opportunities or transactions that would provide substantial return to its shareholders. In addition, a breach of these covenants could cause a default or accelerate some or all of the Company’s indebtedness, which could have a material adverse effect on its financial condition.
 
The Company’s Ability to Continue to Obtain Permanent Financing Cannot Be Assured
 
In the past, the Company has financed certain acquisition and development activities in part with proceeds from its credit facilities or offerings of its debt or equity securities. These financings have been, and may continue to be, replaced by other financings. However, the Company may not be able to obtain more permanent financing for future acquisitions or development activities on acceptable terms. If market interest rates were to increase or other unfavorable market conditions were to exist at a time when amounts were outstanding under the Company’s credit facilities, or if other variable-rate debt was outstanding, the Company’s interest costs would increase, causing potentially adverse effects on its financial condition and results of operations.
 
If the Company Fails to Qualify as a REIT in Any Taxable Year, It Will Be Subject to United States Federal Income Tax as a Regular Corporation and Could Have Significant Tax Liability
 
The Company intends to operate in a manner that allows it to qualify as a REIT for U.S. federal income tax purposes. However, REIT qualification requires that the Company satisfy numerous requirements (some on an annual or quarterly basis) established under highly technical and complex provisions of the Code, for which there are a limited number of judicial or administrative interpretations. The Company’s status as a REIT requires an analysis of various factual matters and circumstances that are not entirely within its control. Accordingly, it is not certain that the Company will be able to qualify and remain qualified as a REIT for U.S. federal income tax purposes. Even a technical or inadvertent violation of the REIT requirements could jeopardize the Company’s REIT qualification. Furthermore, Congress or the Internal Revenue Service (“IRS”) might change the tax laws or regulations and the courts could issue new rulings, in each case potentially having retroactive effect that could make it more difficult or impossible for the Company to continue to qualify as a REIT. If the Company fails to qualify as a REIT in any tax year, then:
 
  • The Company would be taxed as a regular domestic corporation, which, among other things, means that it would be unable to deduct distributions to its shareholders in computing its taxable income and would be subject to U.S. federal income tax on its taxable income at regular corporate rates;
 
  • Any resulting tax liability could be substantial and would reduce the amount of cash available for distribution to shareholders and could force the Company to liquidate assets or take other actions that could have a detrimental effect on its operating results and
 
  • Unless the Company was entitled to relief under applicable statutory provisions, it would be disqualified from treatment as a REIT for the four taxable years following the year during which the Company


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 lost its qualification, and its cash available for distribution to its shareholders therefore would be reduced for each of the years in which the Company does not qualify as a REIT.
 
Even if the Company remains qualified as a REIT, it may face other tax liabilities that reduce its cash flow. The Company may also be subject to certain federal, state and local taxes on its income and property either directly or at the level of its subsidiaries. Any of these taxes would decrease cash available for distribution to the Company’s shareholders.
 
Compliance with REIT Requirements May Negatively Affect the Company’s Operating Decisions
 
To maintain its status as a REIT for U.S. federal income tax purposes, the Company must meet certain requirements, on an ongoing basis, including requirements regarding its sources of income, the nature and diversification of its assets, the amounts the Company distributes to its shareholders and the ownership of its shares. The Company may also be required to make distributions to its shareholders when it does not have funds readily available for distribution or at times when the Company’s funds are otherwise needed to fund capital expenditures.
 
As a REIT, the Company must distribute at least 90% of its annual net taxable income (excluding net capital gains) to its shareholders. To the extent that the Company satisfies this distribution requirement, but distributes less than 100% of its net taxable income, the Company will be subject to U.S. federal corporate income tax on its undistributed taxable income. In addition, the Company will be subject to a 4% nondeductible excise tax if the actual amount paid to its shareholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. From time to time, the Company may generate taxable income greater than its income for financial reporting purposes, or its net taxable income may be greater than its cash flow available for distribution to its shareholders. If the Company does not have other funds available in these situations, it could be required to borrow funds, sell a portion of its securities or properties at unfavorable prices or find other sources of funds in order to meet the REIT distribution requirements and to avoid corporate income tax and the 4% excise tax.
 
In addition, the REIT provisions of the Code impose a 100% tax on income from “prohibited transactions.” Prohibited transactions generally include sales of assets that constitute inventory or other property held for sale to customers in the ordinary course of business, other than foreclosure property. This 100% tax could impact the Company’s decisions to sell property if it believes such sales could be treated as a prohibited transaction. However, the Company would not be subject to this tax if it were to sell assets through a taxable REIT subsidiary. The Company will also be subject to a 100% tax on certain amounts if the economic arrangements between the Company and a taxable REIT subsidiary are not comparable to similar arrangements among unrelated parties.
 
Dividends Paid by REITs Generally Do Not Qualify for Reduced Tax Rates
 
In general, the maximum U.S. federal income tax rate for dividends paid to individual U.S. shareholders is 15% (through 2008). Unlike dividends received from a corporation that is not a REIT, the Company’s distributions to individual shareholders generally are not eligible for the reduced rates.
 
Property Ownership Through Partnerships and Joint Ventures Could Limit the Company’s Control of Those Investments and Reduce Its Expected Return
 
Partnership or joint venture investments may involve risks not otherwise present for investments made solely by the Company, including the possibility that the Company’s partner or co-venturer might become bankrupt, that its partner or co-venturer might at any time have different interests or goals than the Company, and that its partner or co-venturer may take action contrary to the Company’s instructions, requests, policies or objectives, including the Company’s policy with respect to maintaining its qualification as a REIT. Other risks of joint venture investments include impasse on decisions, such as a sale, because neither the Company’s partner or co-venturer nor the Company would have full control over the partnership or joint venture. These factors could limit the return that the Company receives from such investments or cause its cash flows to be lower than its estimates. There is no limitation under the Company’s Articles of Incorporation, or its code of regulations, as to the amount of funds that the Company may invest in partnerships or joint ventures. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture. Furthermore, if the current constrained credit conditions in the capital markets persist or deteriorate further, the Company could be required to reduce the carrying value of its equity method investments if a loss in the carrying value of the investment is other than a temporary decline pursuant to APB 18, “The Equity Method of Accounting for Investments


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in Common Stock”. As of December 31, 2008, the Company had approximately $583.8 million of investments in and advances to unconsolidated joint ventures holding 329 operating shopping centers.
 
The Company’s Inability to Realize Anticipated Returns from Its Retail Real Estate Investments Outside the United States Could Adversely Affect Its Results of Operations
 
The Company may not realize the intended benefits of transactions outside the United States, as the Company may not have any prior experience with the local economies or culture. The assets may not perform as well as the Company anticipated or may not be successfully integrated, or the Company may not realize the improvements in occupancy and operating results that it anticipated. The Company could be subject to local laws governing these properties, with which it has no prior experience, and which may present new challenges for the management of the Company’s operations. In addition, financing may not be available at acceptable rates and equity requirements may be different than the company’s strategy in the United States. Each of these factors may adversely affect the Company’s ability to achieve anticipated return on investment, which could have an adverse effect on its results of operations.
 
The Company’s Real Estate Investments May Contain Environmental Risks That Could Adversely Affect Its Operating Results
 
The acquisition of properties may subject the Company to liabilities, including environmental liabilities. The Company’s operating expenses could be higher than anticipated due to the cost of complying with existing or future environmental laws and regulations. In addition, under various federal, state and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property or to have arranged for the disposal or treatment of hazardous or toxic substances. As a result, the Company may become liable for the costs of removal or remediation of certain hazardous substances released on or in its property. The Company may also be liable for other potential costs that could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). The Company may incur such liability whether or not it knew of, or was responsible for, the presence of such hazardous or toxic substances. Such liability could be of substantial magnitude and divert management’s attention from other aspects of the Company’s business and, as a result, could have a material adverse effect on the Company’s operating results and financial condition, as well as its ability to make distributions to shareholders.
 
An Uninsured Loss on the Company’s Properties or a Loss That Exceeds the Limits of the Company’s Insurance Policies Could Subject the Company to Lost Capital or Revenue on Those Properties
 
Under the terms and conditions of the leases currently in effect on the Company’s properties, tenants generally are required to indemnify and hold the Company harmless from liabilities resulting from injury to persons, air, water, land or property, on or off the premises, due to activities conducted on the properties, except for claims arising from the negligence or intentional misconduct of the Company or its agents. Additionally, tenants are generally required, at the tenant’s expense, to obtain and keep in full force during the term of the lease, liability and full replacement value property damage insurance policies. The Company has obtained comprehensive liability, casualty, flood and rental loss insurance policies on the properties. All of these policies may involve substantial deductibles and certain exclusions. In addition, tenants could fail to properly maintain their insurance policies or be unable to pay the deductibles. Should a loss occur that is uninsured or is in an amount exceeding the combined aggregate limits for the policies noted above, or in the event of a loss that is subject to a substantial deductible under an insurance policy, the Company could lose all or part of its capital invested in, and anticipated revenue from, one or more of the properties, which could have a material adverse effect on the Company’s operating results and financial condition, as well as its ability to make distributions to shareholders.
 
Compliance with the Americans with Disabilities Act and Fire, Safety and Other Regulations May Require the Company to Make Unplanned Expenditures That Adversely Impact the Company’s Cash Flows
 
All of the Company’s properties are required to comply with the Americans with Disabilities Act (“ADA”). The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers, and non-compliance could result in imposition of fines by the


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U.S. government or an award of damages to private litigants, or both. While the tenants to whom the Company leases properties are obligated by law to comply with the ADA provisions, and are typically obligated to cover costs of compliance, if required changes involve greater expenditures than anticipated, or if the changes must be made on a more accelerated basis than anticipated, the ability of these tenants to cover costs could be adversely affected. As a result, the Company could be required to expend funds to comply with the provisions of the ADA, which could adversely affect the results of operations and financial condition and its ability to make distributions to shareholders. In addition, the Company is required to operate the properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to the properties. The Company may be required to make substantial capital expenditures to comply with those requirements, and these expenditures could have a material adverse effect on its ability to meet the financial obligations and make distributions to shareholders.
 
Changes in Market Conditions Could Adversely Affect the Market Price of the Company’s Publicly Traded Securities
 
As with other publicly traded securities, the market price of the Company’s publicly traded securities depends on various market conditions, which may change from time to time. Among the market conditions that may affect the market price of the Company’s publicly traded securities are the following:
 
  • The extent of institutional investor interest in the Company;
 
  • The reputation of REITs generally and the reputation of REITs with similar portfolios;
 
  • The attractiveness of the securities of REITs in comparison to securities issued by other entities (including securities issued by other real estate companies);
 
  • The Company’s financial condition and performance;
 
  • The market’s perception of the Company’s growth potential and future cash dividends;
 
  • An increase in market interest rates, which may lead prospective investors to demand a higher distribution rate in relation to the price paid for the Company’s shares and
 
  • General economic and financial market conditions.
 
The Company May Issue Additional Securities Without Shareholder Approval
 
The Company can issue preferred shares and common shares without shareholder approval subject to certain limitations in the Company’s Articles of Incorporation. Holders of preferred shares have priority over holders of common shares, and the issuance of additional shares reduces the interest of existing holders in the Company.
 
The Company’s Executive Officers Have Agreements That Provide Them with Benefits in the Event of a Change in Control of the Company or if Their Employment is Terminated Without Cause
 
The Company has entered into employment and other agreements with certain executive officers that provide them with severance benefits if their employment ends under certain circumstances following a change in control of the Company or if the Company terminates the executive officer “without cause” as defined in the employment agreements. These benefits could increase the cost to a potential acquirer of the Company and thereby prevent or deter a change in control of the Company that might involve a premium price for the common shares or otherwise affect the interests of shareholders.
 
Item 1B.  UNRESOLVED STAFF COMMENTS
 
None.
 
Item 2.  PROPERTIES
 
At December 31, 2008, the Portfolio Properties included 702 shopping centers (including 329 centers owned through unconsolidated joint ventures and 40 that are otherwise consolidated by the Company) and six business centers. The shopping centers consist of 670 community shopping centers, 24 enclosed malls and eight lifestyle


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centers. The Portfolio Properties also include more than 2,000 undeveloped acres, primarily development sites and parcels, located adjacent to certain of the shopping centers. The shopping centers aggregate approximately 117.4 million square feet of Company-owned Gross Leasable Area (“GLA”) (approximately 149.5 million square feet of total GLA) and are located in 45 states, plus Puerto Rico and Brazil. The shopping centers are principally located in the Southeast and Midwest, with significant concentrations in Florida, Georgia and New York. The Company also has assets under development in Canada and Russia. The business centers aggregate 0.5 million square feet of Company-owned GLA and are located in four states, primarily in Maryland.
 
The Company’s shopping centers are designed to attract local area customers and are typically anchored by two or more national tenant anchors (such as Wal-Mart, Kohl’s or Target). The properties often include a supermarket, drug store, junior department storeand/or other major “category-killer” discount retailers as additional anchors or tenants. The tenants of the shopping centers typically offer day-to-day necessities rather than high-priced luxury items. As one of the nation’s largest owners and operators of shopping centers, the Company has established close relationships with a large number of major national and regional retailers, many of which occupy space in the shopping centers.
 
Shopping centers make up the largest portion of the Company’s shopping center portfolio, constituting 106.2 million (90.4%) square feet of Company-owned GLA. Enclosed malls account for 8.4 million square feet (7.1%) of Company-owned GLA, and lifestyle centers account for 2.9 million square feet (2.5%) of Company-owned GLA. At December 31, 2008, the average annualized base rent per square foot of Company-owned GLA of the Company’s 333 wholly-owned shopping centers was $11.74. For the 369 shopping centers owned through joint ventures, 40 of which are consolidated, annualized base rent per square foot was $12.33. The average annualized base rent per square foot of the Company’s business centers was $12.28.
 
Information as to the Company’s ten largest tenants based on total annualized rental revenues and Company-owned GLA at December 31, 2008, is set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of this Annual Report onForm 10-K.In addition, as of December 31, 2008, unless otherwise indicated, with respect to the 702 shopping centers:
 
  • 168 of these properties are anchored by a Wal-Mart, Kohl’s or Target store;
 
  • These properties range in size from 6,000 square feet to approximately 1,500,000 square feet of total GLA (with 96 properties exceeding 400,000 square feet of total GLA and 291 properties exceeding 200,000 square feet of total GLA);
 
  • Approximately 66.7% of the aggregate Company-owned GLA of these properties is leased to national tenants, including subsidiaries of national tenants, approximately 15.6% is leased to regional tenants and approximately 9.8% is leased to local tenants;
 
  • Approximately 92.1% of the aggregate Company-owned GLA of these properties was occupied as of December 31, 2008. With respect to the properties owned by the Company, or its unconsolidated joint ventures, as of December 31 of each of the last five years beginning with 2004, between 92.1% and 95.3% of the aggregate Company-owned GLA of these properties was occupied;
 
  • Three wholly-owned properties are currently being expanded by the Company, and three properties owned by unconsolidated joint ventures are being expanded; and
 
  • Ten wholly-owned properties are currently being developed by the Company.


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Tenant Lease Expirations and Renewals
 
The following table shows tenant lease expirations for the next 10 years at the Company’s 333 wholly-owned shopping centers and six business centers, assuming that none of the tenants exercise any of their renewal options:
 
                         
           Average
  Percentage of
    
        Annualized
  Base
  Total Leased
  Percentage of
 
     Approximate
  Base Rent
  Rent Per Sq.
  Sq. Footage
  Total Base
 
  No. of
  Lease Area in
  Under Expiring
  Foot Under
  Represented
  Rental Revenues
 
Expiration
 Leases
  Square Feet
  Leases
  Expiring
  by Expiring
  Represented by
 
Year
 Expiring  (Thousands)  (Thousands)  Leases  Leases  Expiring Leases 
 
2009
  813   3,600  $49,787  $13.83   6.6%  8.7%
2010
  707   4,241   50,801   11.98   7.8   8.8 
2011
  789   4,833   65,547   13.56   8.9   11.4 
2012
  620   5,302   62,918   11.87   9.7   10.9 
2013
  599   5,290   60,627   11.46   9.7   10.5 
2014
  242   3,608   39,146   10.85   6.6   6.8 
2015
  171   3,220   35,075   10.89   5.9   6.1 
2016
  151   2,384   30,383   12.75   4.4   5.3 
2017
  159   2,977   34,619   11.63   5.5   6.0 
2018
  161   2,518   32,536   12.93   4.6   5.7 
                         
Total
  4,412   37,973  $461,439  $12.15   69.8%  80.2%
                         
 
The following table shows tenant lease expirations for the next ten years at the Company’s 369 unconsolidated joint venture shopping centers, including 40 consolidated shopping centers, assuming that none of the tenants exercise any of their renewal options:
 
                         
           Average
  Percentage of
    
        Annualized
  Base
  Total Leased
  Percentage of
 
     Approximate
  Base Rent
  Rent Per Sq.
  Sq. Footage
  Total Base
 
  No. of
  Lease Area in
  Under Expiring
  Foot Under
  Represented
  Rental Revenues
 
Expiration
 Leases
  Square Feet
  Leases
  Expiring
  by Expiring
  Represented by
 
Year
 Expiring  (Thousands)  (Thousands)  Leases  Leases  Expiring Leases 
 
2009
  1,317   4,452  $64,372  $14.46   7.0%  8.9%
2010
  1,055   5,228   75,335   14.41   8.3   10.4 
2011
  1,133   5,607   90,023   16.06   8.8   12.4 
2012
  1,096   5,995   90,101   15.03   9.5   12.4 
2013
  972   5,281   77,640   14.70   8.3   10.7 
2014
  282   4,146   48,296   11.65   6.5   6.6 
2015
  152   2,897   33,974   11.73   4.6   4.7 
2016
  145   3,235   34,580   10.69   5.1   4.8 
2017
  135   2,844   35,130   12.35   4.5   4.8 
2018
  139   2,207   30,063   13.62   3.5   4.1 
                         
Total
  6,426   41,892  $579,514  $13.83   66.1%  79.8%
                         
 
The rental payments under certain of these leases will remain constant until the expiration of their base terms, regardless of inflationary increases. There can be no assurance that any of these leases will be renewed or that any replacement tenants will be obtained if not renewed.


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Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
    Alabama                                      
 
1
  Birmingham, AL Brook Highland Plaza
5291 Highway, 280 South		 35242 SC  Fee  1994/2003  1994   100%   424,360  $4,349,367  $10.68   84.6%  Dick’s Clothing and Sporting Goods (2017), Lowe’s (2023),
Stein Mart (2011), Office Max (2011), Michaels (2014),
Homegoods (2016), Books-A-Million (2010), Ross Dress For Less (2014)
 
2
  Birmingham, AL Eastwood Festival Center
7001 Crestwood Boulevard		 35210 SC  Fee  1989/1999  1995   100%   300,280  $1,120,592  $7.19   51.9%  Dollar Tree (2013), Burlington Coat Factory (2013), Western
Supermarkets (Not Owned), Home Depot (Not Owned)
 
3
  Birmingham, AL River Ridge
U.S. Highway 280		 35242 SC  Fee (3) 2001  2007   15%   172,304  $2,180,854  $17.12   73.9%  Staples (2016), Best Buy (2017), Super Target (Not Owned)
 
4
  Birmingham, AL Riverchase Promenade (I)
Montgomery Highway		 35244 SC  Fee (3) 1989  2002   14.5%   120,108  $1,687,973  $14.55   96.6%  Marshalls (2009), Toys “R” Us (Not Owned), Goody’s (Not Owned)
 
5
  Cullman, AL Lowe’s Home Improvement
1717 Cherokee Avenue S.W.		 35055 SC  Fee  1998  2007   100%   101,287  $682,500  $6.74   100%  Lowe’s (2015)
 
6
  Dothan, AL Circuit City - Dothan
2821 Montgomery Highway		 36303 SC  Fee  2004  2007   100%   33,906  $567,926  $16.75   100%  Circuit City (2020)
 
7
  Dothan, AL Shops on the Circle
3500 Ross Clark Circle		 36303 SC  Fee  2000  2007   100%   149,085  $1,655,277  $11.58   95.9%  Old Navy (2010), T.J. Maxx (2010), Office Max (2016)
 
8
  Florence, AL Cox Creek Shopping Center
374-398 Cox Creek Parkway		 35360 SC  Fee (3) 2001  2007   15%   173,989  $1,494,727  $11.33   75.8%  Best Buy (2017), Michaels(2011), Dick’s Clothing and Sporting Goods (2017), Target (Not Owned)
 
9
  Huntsville, AL Westside Centre
6275 University Drive		 35806 SC  Fee (3) 2002  2007   15%   476,146  $4,960,461  $11.64   89.5%  Babies “R” Us (2012), Marshalls (2011), Bed Bath & Beyond (2012), Michaels (2011), Goody’s (2016), Dick’s Clothing and Sporting Goods (2017), Stein Mart (2011), Ross Dress For Less (2013), Target (Not Owned)


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Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
10
  Opelika, AL Pepperell Corners
2300-2600 Pepperell Parkway		 36801 SC  Fee  1995  2003   100%   306,224  $673,349  $6.93   31.7%  Goody’s (2011)
 
11
  Scottsboro, AL Scottsboro Marketplace
24833 John P. Reid Parkway		 35766 SC  Fee  1999  2003   100%   40,560  $460,176  $11.35   100%  Goody’s (2011), Wal-Mart (Not Owned)
 
12
  Tuscaloosa, AL McFarland Plaza
2600 McFarland Building East		 35404 SC  Fee (3) 1999  2007   15%   229,323  $1,177,104  $7.80   65.8%  Stein Mart (2009), Office Max (2015), Toys “R” Us (2011)
    Arizona                                      
 
13
  Ahwatukee, AZ Foothills Towne Center (II)
4711 East Ray Road		 85044 SC  Fee (3) 1996/1997/
1999		  1997   50%   647,883  $10,487,530  $16.23   96.2%  Jo-Ann Stores (2010), Best Buy (2014), AMC Theatres (2021), Bassett Furniture (2010), Ashley Furniture Homestore (2011), Barnes & Noble (2012), Babies “R” Us (2012), Stein Mart (2011), Ross Dress For Less (2012), Office Max (2012)
 
14
  Chandler, AZ Mervyns Plaza
2992 North Alma School Road		 85224 MV  Fee  1985  2005   50%   74,862  $700,397  $9.36   100%  Mervyns (2020)
 
15
  Mesa, AZ Superstition Springs Center
6505 East Southern Avenue		 85206 MV  Fee  1990  2005   50%   86,858  $1,198,104  $13.79   100%  Mervyns (2020)
 
16
  Phoenix, AZ Deer Valley
4255 West Thunderbird Road		 85053 MV  Fee  1979  2005   50%   81,009  $852,150  $10.52   100%  Mervyns (2020)
 
17
  Phoenix, AZ Arrowhead Crossings
7553 West Bell Road		 85382 SC  Fee (3) 1995  1996   50%   346,428  $3,834,009  $14.48   76.4%  Staples (2009), Homegoods (2013), Mac Frugal’s (2010), Barnes & Noble (2011), T.J. Maxx (2011), DSW Shoe Warehouse (2017), Bassett Furniture (2009), Fry’s (Not Owned)
 
18
  Phoenix, AZ Silver Creek Plaza
4710 East Ray Road		 85044 MV  Fee  1994  2005   50%   76,214  $0  $0.00   0%   
 
19
  Phoenix, AZ Phoenix Spectrum Mall
1703 West Bethany Home Road		 85015 SC  GL (3) 1961  2004   20%   452,065  $7,145,771  $11.62   95.4%  Wal-Mart (2023), Costco Wholesale (2020), Ross Dress For Less (2013), PetSmart (2019), JCPenney (2037), Harkins Theatre (2022), Target (Not Owned)


18

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
20
  Phoenix, AZ Deer Valley Towne Center 2805 West Aqua Fria Freeway 85027 SC  Fee  1996  1999   100%   194,009  $3,056,451  $15.87   97.1%  Ross Dress For Less (2014), Office Max (2013), PetSmart (2014), Michaels (2014), AMC Theatres (Not Owned), Target (Not Owned)
 
21
  Phoenix, AZ Paradise Village Gateway
Tatum & Shea Boulevard South		 85028 SC  Fee  1997/2004  2003   67%   223,658  $4,542,351  $18.73   96.9%  Bed Bath & Beyond (2011), Ross Dress For Less (2012), PetSmart (2015), Staples (2010), Albertson’s (2016)
 
22
  Tucson, AZ Santa Cruz Plaza
3660 South 16th Avenue		 85713 MV  Fee  1982  2005   50%   76,126  $533,788  $7.01   100%  Mervyns (2020)
    Arkansas                                      
 
23
  Fayetteville, AR Spring Creek Centre
464 East Joyce Boulevard		 72703 SC  Fee (3) 1997/1999/
2000/2001		  1997   14.5%   262,827  $2,553,698  $12.01   80.9%  T.J. Maxx (2011), Best Buy (2017), Old Navy (2010), Bed Bath & Beyond (2009), Wal-Mart Super Center (Not Owned),
Home Depot (Not Owned)
 
24
  Fayetteville, AR Steele Crossing
3533-3595 North Shiloh Drive		 72703 SC  Fee (3) 2003  2003   14.5%   50,314  $1,025,935  $14.81   100%  Kohl’s (2022), Target (Not Owned)
 
25
  North Little Rock, AR McCain Plaza
4124 East McCain Boulevard		 72117 SC  Fee  1991/2004  1994   100%   295,013  $2,024,129  $7.17   95.7%  Bed Bath & Beyond (2013), T.J. Maxx (2012), Cinemark (2011), Burlington Coat Factory (2014), Michaels (2014)
 
26
  Russellville, AR Valley Park Centre
3093 East Main Street		 72801 SC  Fee  1992  1994   100%   266,539  $1,576,540  $6.51   90.8%  Hobby Lobby (2016), Stage (2010), JCPenney (2012), Belk (2021)
    Brazil                                      
 
27
  Brasilia Patio Brasil Shopping Scs Quadra 07 Bl A 70307-902 MM  Fee  1997/2001  2006   4.95%   331,300  $11,839,094  $36.45   98%  Lojas Americanas (Not Owned), Otoch (2009), Riachuelo (2017), Renner (2011), Centauro (2009)


19

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
28
  Campinas Parque Dom Pedro Avenue
Guilherme Campos, 500		 01387-001 MM  Fee  2001  2006   48.73%   1,324,565  $21,647,480  $17.61   96%  Lojas Americanas (2014), Casas Bahia (2011), Centauro (2012), Pet Center Marginal (2010), Marisa (2016), Star Bowling (2009), Big (2017), Etna (2015), Alpini Veiculos (2012), Pernambucanas (2012), Formula Academia (2014), Riachuelo (2012), Zara (2014), Renner (2014), Fnac (2012), Multiplex P.D.Pedro (2012)
 
29
  Franca Franca Shopping Avenue
Rio Negro, 1100		 14406-901 MM  Fee  1993  2006   30.65%   198,480  $1,661,938  $9.47   97%  C&A (2016), Casas Bahia (2009), Magazine Luiza (2010), Lojas Americanas (2014), C&C (2011)
 
30
  Sao Bernardo Do Campo Shopping Metropole
Praca Samuel Sabatine, 200		 09750-902 MM  Fee  1980/95/97  2006   39.4%   290,597  $7,202,827  $35.93   97%  Renner (2009), Lojas Americanas (2018)
 
31
  Sao Paulo Boavista Shopping Rua
Borba Gato, 59		 04747-030 MM  Fee  2004  2006   47.52%   275,270  $2,709,237  $10.54   92%  C&A (2014), Marisa & Familia (2014), Americanas Express (2017), Sonda (Not Owned)
 
32
  Sao Paulo Campo Limpo Shopping Estrada Do Campo
Limpo 459		 05777-001 MM  Fee  2005  2006   9.50%   280,839  $3,189,699  $15.38   98%  C&A (2016), Marisa (2016), Compre Bem (2012), Casas Bahia (2011)
 
33
  Sao Paulo Shopping Penha
Rua Dr. Joao Ribeiro, 304		 03634-010 MM  Fee  1992/2004  2006   34.8%   325,183  $5,495,500  $17.75   96%  Marisa (2017), Magazine Luiza (2013), Sonda (2014), Lojas Americanas (2013), Kalunga (2010), C&A (2014)
 
34
  Sao Paulo Plaza Sul
Praca Leonor Kaupa		 04151-100 MM  Fee  1994  2006   14.25%   248,988  $8,295,412  $33.58   99%  Lojas Americanas (2011), Luigi Bertolli (2009), Camicado (2010), Monday Academia (2009), Renner (2010)
 
35
  Sao Paulo Tivoli Shopping
Av. Santa Barbara, 777		 13456-080 MM  Fee  1993/2006  2006   14.25%   234,392  $2,842,171  $12.34   98%  Lojas Americanas (2014), Unimed (2010), Magazine Luiza (2013), C&A (2016), C&C (2011), Paulistao (2016)


20

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
    California                                      
 
36
  Anaheim, CA Anaheim Hills Festival Center
8100 East Santa Canyon Road		 92808 MV  Fee  1992  2005   50%   77,883  $1,354,101  $17.39   100%  Mervyns (2020)
 
37
  Antioch, CA County East Shopping Center
2602 Somersville Road		 94509 MV  Fee  1970  2005   50%   75,339  $0  $0.00   0%   
 
38
  Buena Park, CA Buena Park Mall and
Entertainment 100 Buena Park		 90620 SC  Fee (3) 1965  2004   20%   735,130  $9,589,000  $17.92   71.7%  Circuit City (2018), DSW Shoe Warehouse (2013), Ross Dress For Less (2015), Bed Bath & Beyond (2011), 24 Hour Fitness (2022), Kohl’s (2024), Krikorian Premier Theatres (2023), Michaels(2014), Sears (Not Owned), Wal-Mart (Not Owned)
 
39
  Burbank, CA Burbank Town Center
245 East Magnolia Boulevard		 91502 MV  GL  1991  2005   50%   89,182  $1,657,357  $18.58   100%  Mervyns (2020)
 
40
  Chino, CA Chino Town Square Shopping
5517 Philadelphia		 91710 MV  Fee  1986  2005   50%   81,282  $905,210  $11.14   100%  Mervyns (2020)
 
41
  Clovis, CA Sierra Vista Mall
1000 Shaw Avenue		 93612 MV  GL  1988  2005   50%   75,088  $742,846  $9.89   100%  Mervyns (2020)
 
42
  Culver City, CA Circuit City - Culver City
5660 Sepulveda Boulevard		 90230 SC  Fee  1998  2007   100%   32,873  $680,062  $20.69   100%  Circuit City (2018)
 
43
  El Cajon, CA Westfield Shopping Town
565 Fletcher Parkway		 92020 MV  GL  1989  2005   50%   85,744  $1,304,225  $15.21   100%  Mervyns (2020)
 
44
  Fairfield, CA Westfield Solano Mall
1451 Gateway Boulevard		 94533 MV  Fee  1981  2005   50%   89,223  $0  $0.00   0%   
 
45
  Folsom, CA Folsom Square
1010 East Bidwell Street		 95630 MV  Fee  2003  2005   50%   79,080  $1,201,287  $15.19   100%  Mervyns (2020)
 
46
  Foothill Ranch, CA Foothill Ranch Town Centre
26732 Portola Parkway		 92610 MV  Fee  1993  2005   50%   77,934  $0  $0.00   0%   
 
47
  Garden Grove, CA Garden Grove Center
13092 Harbor Boulevard		 92843 MV  Fee  1982  2005   50%   83,746  $783,171  $9.35   100%  Mervyns (2020)
 
48
  Lancaster, CA Valley Central - Discount
44707-44765 Valley Central Way		 93536 SC  Fee (3) 1990  2001   21%   353,483  $3,075,684  $15.01   58%  Marshalls (2012), Staples (2013), Cinemark (2017), 99 Cents Only (2014), Michaels (2018), Costco (Not Owned)


21

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
49
  Lompac, CA Mission Plaza
1600 North H Street		 93436 MV  Fee  1992  2005   50%   62,523  $365,056  $5.84   100%  Mervyns (2020)
 
50
  Long Beach, CA The Pike
95 South Pine Avenue		 90802 SC  GL  2005  1*  100%   281,535  $5,810,300  $19.86   94.8%  Cinemark (2017), Borders (2016), Club V2O (2019), Gameworks (2017)
 
51
  Madera, CA Madera
1467 Country Club Drive		 93638 MV  Fee  1990  2005   50%   59,720  $209,050  $3.50   100%  Mervyns (2020)
 
52
  North Fullerton, CA North Fullerton
200 Imperial Highway		 92835 MV  Fee  1991  2005   50%   76,360  $803,334  $10.52   100%  Mervyns (2020)
 
53
  Northridge, CA Northridge Plaza
8800 Corbin Avenue		 91324 MV  GL  1980  2005   50%   75,326  $564,563  $7.49   100%  Mervyns (2020)
 
54
  Oceanside, CA Ocean Place Cinemas
401-409 Mission Avenue		 92054 SC  Fee  2000  2000   100%   79,884  $1,330,878  $16.66   100%  Regal Cinemas (2014)
 
55
  Palmdale, CA Antelope Valley Mall
1305 West Rancho Vista Boulevard		 93551 MV  Fee  1992  2005   50%   76,550  $862,762  $11.27   100%  Mervyns (2020)
 
56
  Pasadena, CA Paseo Colorado
280 East Colorado Boulevard		 91101 LC  Fee  2001  2003   100%   556,271  $11,519,938  $21.97   94.3%  Gelson’s Market (2021), Loehmann’s (2015), Equinox (2017), Macy’s (2010), Pacific Theatres (2016), DSW Shoe Warehouse (2011)
 
57
  Pleasant Hill, CA Downtown Pleasant Hill
2255 Contra Costa Boulevard #101		 94520 SC  Fee(3) 1999/2000  2001   20%   345,930  $6,431,048  $19.72   94.3%  Lucky Supermarket (2020), Michaels (2010), Borders (2015), Ross Dress For Less (2010), Bed Bath & Beyond (2010), Century Theatre (2016)
 
58
  Porterville, CA Porterville Market Place
1275 West Henderson Avenue		 93257 MV  Fee  1991  2005   50%   76,378  $535,910  $7.02   100%  Mervyns (2020)
 
59
  Redding, CA Shasta Center
1755 Hilltop Drive		 96002 MV  Fee  1984  2005   50%   61,363  $645,214  $10.51   100%  Mervyns (2020)
 
60
  Richmond, CA Hilltop Plaza
3401 Blume Drive		 94803 SC  Fee(3) 1996/2000  2002   20%   245,774  $3,858,794  $16.07   97.7%  99 Cents Only Stores (2011), PetSmart (2012), Ross Dress For Less (2013), Barnes & Noble (2011), Century Theatre (2016)
 
61
  San Diego, CA Southland Plaza Shopping
575 Saturn Boulevard		 92154 MV  Fee  1982  2005   50%   75,207  $1,054,841  $14.03   100%  Mervyns (2020)
 
62
  San Diego, CA College Grove Shopping Center
3450 College Avenue		 92115 MV  Fee  1991  2005   50%   73,872  $880,775  $11.92   100%  Mervyns (2020)


22

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
63
  San Francisco, CA Van Ness Plaza 125
1000 Van Ness Avenue		 94109 SC  Fee  1998  2002   100%   123,755  $3,971,743  $38.48   83.4%  AMC Theatre (2030), Crunch Fitness (2009)
 
64
  Santa Maria, CA Town Center West
201 Town Center West		 93458 MV  Fee  1988  2005   50%   84,886  $793,784  $9.35   100%  Mervyns (2020)
 
65
  Santa Rosa, CA Santa Rosa Plaza
600 Santa Rosa Plaza		 95401 MV  Fee  1981  2005   50%   90,348  $1,588,628  $17.58   100%  Mervyns (2020)
 
66
  Slatten Ranch, CA Slatten Ranch Shopping Center
5849 Lone Tree Way		 94531 MV  Fee  2002  2005   50%   78,819  $1,381,693  $17.53   100%  Mervyns (2020)
 
67
  Sonora, CA Sonora Crossroad Shopping
1151 Sanguinetti Road		 95370 MV  Fee  1993  2005   50%   62,214  $763,009  $12.26   100%  Mervyns (2020)
 
68
  Tulare, CA Arbor Faire Shopping Center
1675 Hillman Street		 93274 MV  Fee  1991  2005   50%   62,947  $588,970  $9.36   100%  Mervyns (2020)
 
69
  Ukiah, CA Ukiah
437 North Orchard Avenue		 95482 MV  Fee  1990  2005   50%   58,841  $343,831  $5.84   100%  Mervyns (2020)
 
70
  Valencia, CA Mervyns Valencia
24235 Magic Mountain Parkway		 91355 SC  GL  1986  2006   100%   75,590  $989,420  $13.09   100%  Mervyns (2020)
 
71
  West Covina, CA West Covina Shopping Center
2753 East Eastland Center Drive		 91791 MV  GL  1979  2005   50%   79,800  $1,607,730  $20.15   100%  Mervyns (2020)
    Colorado                                      
 
72
  Aurora, CO Pioneer Hills
5400-5820 South Parker		 80012 SC  Fee (3) 2003  2003   14.5%   127,215  $2,321,316  $18.12   91.8%  Bed Bath & Beyond (2012), Office Depot (2017),Wal-Mart(Not Owned), Home Depot (Not Owned)
 
73
  Broomfield, CO Flatiron Marketplace Garden
1 West Flatiron Circle		 80021 SC  Fee  2001  2003   100%   252,035  $4,085,632  $20.91   77.5%  Nordstrom Rack (2011), Best Buy (2016), Office Depot
(2016), Great Indoors (Not Owned)
 
74
  Denver, CO Centennial Promenade
9555 East County Line Road		 80223 SC  Fee  1997/2002  1997   100%   408,337  $7,004,611  $17.74   96.7%  Golfsmith Golf Center (2012), Soundtrack (2017), Ross Dress For Less (2013), Office Max (2012), Michaels (2012), Toys “R” Us (2011), Borders (2017), Loehmann’s (2012),
Recreational Equipment (Not Owned), Home Depot (Not Owned)


23

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
75
  Denver, CO Tamarac Square
7777 East Hampden		 80231 SC  Fee  1976  2001   100%   183,611  $1,902,467  $13.59   69.9%  Regency Theatres Tamarac Square (2009)
 
76
  Denver, CO University Hills
2730 South Colorado Boulevard		 80222 SC  Fee  1997  2003   100%   244,383  $3,792,744  $17.89   86.7%  Pier 1 Imports (2014), Office Max (2012), King Soopers
(2017)
 
77
  Fort Collins, CO Mulberry & Lemay Crossing
Mulberry Street & South Lemay Avenue		 80525 SC  Fee  2004  2003   100%   18,988  $393,944  $23.89   86.8%  Wal-Mart (Not Owned), Home Depot (Not Owned)
 
78
  Highland Ranch, CO Circuit City - Highland Ranch
8575 South Quebec Street		 80130 SC  Fee  1998  2007   100%   43,480  $443,625  $10.20   100%  Circuit City (2018)
 
79
  Littleton, CO Aspen Grove
7301 South Santa Fe		 80120 LC  Fee  2002  1*  100%   231,450  $6,028,977  $27.45   88.9%   
 
80
  Parker, CO Flatacres Marketcenter
South Parker Road		 80134 SC  GL (3) 2003  2003   14.5%   116,644  $2,084,091  $15.23   100%  Bed Bath & Beyond (2014), Gart Sports (2014),
Michaels(2013), Kohl’s (Not Owned)
 
81
  Parker, CO Parker Pavilions
11153-11183 South Parker Road		 80134 SC  Fee (3) 2003  2003   14.5%   89,631  $1,447,663  $18.66   81.4%  Office Depot (2016), Home Depot (Not Owned), Wal-Mart (Not Owned)
    Connecticut                                      
 
82
  Manchester, CT Manchester Broad Street
286 Broad Street		 06040 SC  Fee  1995/2003  2007   100%   68,509  $1,075,480  $15.70   100%  Stop & Shop (2028)
 
83
  Plainville, CT Connecticut Commons
I-84 & Route 9		 06062 SC  Fee (3) 1999/2001  1*  15%   463,338  $5,983,672  $11.78   92.7%  Lowe’s (2019), Loew’s Cinema (2019), Kohl’s (2022), DSW Shoe Warehouse (2015), Dick’s Clothing and Sporting Goods (2020), PetSmart (2015), A.C. Moore (2014), Old Navy
(2011), Marshalls (2018)
 
84
  Waterbury, CT Naugatuck Valley Shopping Center
950 Wolcott Street		 06705 SC  Fee (3) 2003  2007   15%   232,085  $3,775,480  $17.76   81.9%  Wal-Mart (2027), Bob’s Stores (2017), Stop & Shop (2021), Staples (2018)
 
85
  Windsor Court, CT Windsor Court Shopping Center
1095 Kennedy Road		 06095 SC  Fee  1993  2007   100%   78,480  $1,401,225  $17.85   100%  Stop & Shop (2013)
    Delaware                                      
 
86
  Dover, DE Kmart Shopping Center
515 North Dupont Highway		 19901 SC  Fee (3) 1973  2008   25.25%   84,180  $301,000  $2.86   100%  Kmart (2009)


24

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
    Florida                                      
 
87
  Apopka, FL Piedmont Plaza
2302-2444 E Semoran Boulevard		 32703 SC  Fee (3) 2004  2007   14.5%   148,075  $1,081,245  $8.22   88.8%  Beall’s (2019), Albertson’s (Not Owned)
 
88
  Bayonet Point, FL Point Plaza
US 19 & State Route 52		 34667 SC  Fee  1985/2003  1/2*  100%   209,714  $1,386,913  $6.61   100%  Publix Super Markets (2010), Beall’s (2014), T.J. Maxx
(2010)
 
89
  Boynton Beach, FL Meadows Square
Hypoluxo Road North Congress Avenue		 33461 SC  Fee (3) 1986  2004   20%   106,224  $1,251,109  $14.00   84.2%  Publix Super Markets (2011)
 
90
  Boynton Beach, FL Boynton Commons
333-399 Congress Avenue		 33426 SC  Fee (3) 1998  2007   15%   210,488  $3,160,798  $15.16   99%  Barnes & Noble (2013), PetSmart (2014), Sports Authority (2013), Bed Bath & Beyond (2014)
 
91
  Boynton Beach, FL Aberdeen Square
4966 Le Chalet Boulevard		 33426 SC  Fee (3) 1990  2007   20%   70,555  $694,723  $10.41   94.5%  Publix Super Markets (2010)
 
92
  Boynton Beach, FL Village Square at Golf
3775 West Woolbright Road		 33436 SC  Fee (3) 1983/2002  2007   20%   126,486  $1,736,796  $14.05   88.6%  Publix Super Markets (2013)
 
93
  Bradenton, FL Lakewood Ranch Plaza
1755 Lakewood Ranch Boulevard		 34211 SC  Fee (3) 2001  2007   20%   69,484  $946,301  $12.26   96.7%  Publix Super Markets (2021)
 
94
  Bradenton, FL Cortez Plaza
Cortez Road West & U.S. Highway 41		 34207 SC  Fee  1966/1988  2007   100%   288,540  $3,068,998  $10.88   97.8%  Publix Super Markets (2010), Burlington Coat Factory
(2013), PetSmart (2012), Circuit City (2010)
 
95
  Bradenton, FL Creekwood Crossing
7395 52nd Place East		 34203 SC  Fee (3) 2001  2007   20%   180,746  $2,078,415  $10.58   89.4%  Beall’s (2016), Beall’s Outlet (2014), Lifestyle Family
Fitness (2014), Macys Furniture & Mattress Clearance Center
(2009)
 
96
  Brandon, FL Kmart Shopping Center
1602 Brandon Boulevard		 33511 SC  GL  1972/1997/
2003		  2*  100%   161,900  $801,248  $3.65   100%  Kmart (2012), Kane Furniture (2022)
 
97
  Brandon, FL Lake Brandon Plaza
Causeway Boulevard		 33511 SC  Fee (3) 1999  2003   14.5%   148,267  $1,932,929  $11.96   100%  CompUSA (2017), Jo-Ann Stores (2017), Babies “R” Us (2013),
Publix Super Markets (2019)
 
98
  Brandon, FL Lake Brandon Village
Causeway Boulevard		 33511 SC  Fee (3) 1997/2004  2003   14.5%   113,986  $1,121,612  $14.23   69.2%  Sports Authority (2018), PetSmart (2020), Lowe’s (Not Owned)


25

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
99
  Casselberry, FL Casselberry Commons
1455 South Semoran Boulevard		 32707 SC  Fee(3) 1973/1998  2007   20%   228,967  $2,071,019  $9.09   87.2%  Publix Super Markets (2012), Ross Dress For Less (2013),
Stein Mart (2015)
 
100
  Clearwater, FL Clearwater Collection
21688-21800 U.S. Highway 19 North		 33765 SC  Fee  1995/2005  2007   100%   132,023  $1,483,948  $12.57   89.4%  L.A. Fitness International (2022), Floor & Decor (2017)
 
101
  Crystal River, FL Crystal Springs Shopping Center
6760 West Gulf to Lake		 34429 SC  Fee (3) 2001  2007   20%   66,986  $688,817  $11.05   93%  Publix Super Markets (2021)
 
102
  Crystal RIver, FL Crystal River Plaza
420 Sun Coast Highway		 33523 SC  Fee  1986/2001  1/2*  100%   169,101  $867,967  $7.68   66.8%  Beall’s (2012), Beall’s Outlet (2011)
 
103
  Dania Beach, FL Bass Pro Outdoor World
200 Gulf Stream Way		 33004 SC  Fee  1999  2007   100%   165,000  $1,600,000  $9.70   100%  Bass Pro Outdoor World (2014)
 
104
  Dania, FL Sheridan Square
401-435 East Sheridan Street		 33004 SC  Fee (3) 1991  2007   20%   67,475  $643,004  $10.31   92.4%  Publix Super Markets (2010)
 
105
  Davie, FL Paradise Promenade
5949-6029 Stirling Road		 33314 SC  Fee (3) 2004  2007   20%   74,493  $1,154,841  $16.11   96.2%  Publix Super Markets (2023)
 
106
  Daytona Beach, FL Volusia
1808 West International Speedway		 32114 SC  Fee  1984  2001   100%   76,087  $838,139  $13.42   82.1%  Marshalls (2010)
 
107
  Deerfield Beach, FL Hillsboro Square
Hillsboro Boulevard & Highway One		 33441 SC  Fee (3) 1978/2002  2007   15%   145,329  $2,238,273  $15.97   96.4%  Publix Super Markets (2022), Office Depot (2023)
 
108
  Englewood, FL Rotonda Plaza
5855 Placida Road		 34224 SC  Fee  1991  2004   100%   46,835  $438,152  $10.06   93%  Kash n’ Karry (2011)
 
109
  Fort Meyers, FL Market Square
13300 South Cleveland
Avenue		 33919 SC  Fee (3) 2004  2007   15%   107,179  $1,708,296  $14.45   100%  American Signature (2014), Total Wine & More (2016), DSW Shoe Warehouse (2016), Target (Not Owned)
 
110
  Fort Meyers, FL Cypress Trace
Cypress Lake Drive & U.S. 41		 33907 SC  Fee (3) 2004  2007   15%   276,288  $2,755,151  $10.04   99.3%  Beall’s (2010), Stein Mart (2013), Beall’s Outlet (2010),
Ross Dress For Less (2012)
 
111
  Fort Walton Beach, FL Shoppes at Paradise Pointe
U.S. Highway 98 & Perry Avenue		 32548 SC  Fee (3) 1987/2000  2007   20%   83,936  $994,286  $13.40   88.4%  Publix Super Markets (2021)
 
112
  Gulf Breeze, FL Gulf Breeze Marketplace
3749-3767 Gulf Breeze Parkway		 32561 SC  Fee  1998  2003   100%   29,827  $494,236  $16.57   100%  Wal-Mart (Not Owned), Lowe’s (Not Owned)
 
113
  Hernando, FL Shoppes of Citrus Hills
2601 Forest Ridge Boulevard		 34442 SC  Fee (3) 1994/2003  2007   20%   68,927  $717,255  $10.70   97.3%  Publix Super Markets (2014)


26

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
114
  Hialeah, FL Paraiso Plaza
3300-3350 West 80th Street		 33018 SC  Fee (3) 1997  2007   20%   60,712  $766,537  $14.01   90.1%  Publix Super Markets (2017)
 
115
  Jacksonville, FL Jacksonville Regional
3000 Dunn Avenue		 32218 SC  Fee  1988  1995   100%   219,735  $1,333,820  $6.73   90.2%  JCPenney (2012), Winn Dixie Stores (2014)
 
116
  Jacksonville, FL Arlington Plaza
926 Arlington Road		 32211 SC  Fee  1990/1999  2004   100%   182,098  $601,727  $7.54   43.8%  Food Lion (2010)
 
117
  Lake Mary, FL Shoppes at Lake Mary
4155 West Lake Mary Boulevard		 32746 SC  Fee (3) 2001  2007   15%   73,343  $1,531,899  $20.68   100%  Staples (2015)
 
118
  Lake Wales, FL Shoppes on the Ridge
Highway 27 & Chalet Suzanne Road		 33859 SC  Fee (3) 2003  2007   20%   115,671  $1,198,314  $12.56   82.5%  Publix Super Markets (2023)
 
119
  Lakeland, FL Highlands Plaza
2228 Lakelands Highland Road		 33803 SC  Fee  1990  2004   100%   102,572  $858,358  $8.86   94.5%  Winn Dixie Stores (2017)
 
120
  Lakeland, FL Lakeland Marketplace
Florida Lakeland		 33803 SC  Fee  2006  2003   100%   77,582  $581,865  $7.50   100%   
 
121
  Largo, FL Colonial Promenade
Bardmoor Center
10801 Starkey Road		 33777 SC  Fee (3) 1991  2007   20%   152,667  $1,865,873  $12.48   96.5%  Publix Super Markets (2011)
 
122
  Largo, FL Kmart Shopping Center
1000 Missouri Avenue		 33770 SC  Fee (3) 1969  2008   25%   116,805  $214,921  $1.84   100%  Kmart (2012)
 
123
  Lauderhill, FL Universal Plaza
7730 West Commercial		 33351 SC  Fee (3) 2002  2007   15%   49,505  $1,048,954  $23.02   92%  Target (Not Owned)
 
124
  Melbourne, FL Melbourne Shopping Center
1301-1441 South Babcock		 32901 SC  Fee (3) 1960/1999  2007   20%   204,202  $1,351,620  $6.89   93.1%  Big Lots (2014), Publix Super Markets (2019)
 
125
  Miami, FL The Shops of Midtown
3401 North Miami Avenue		 33127 SC  Fee  2006  1*  100%   247,599  $5,047,817  $20.27   90.5%  Circuit City (2022), Loehmann’s (2018), Marshalls (2017), Ross Dress For Less (2018), Target (2027), West Elm (2019)
 
126
  Miami, FL Plaza Del Paraiso
12100 S.W. 127th Avenue		 33186 SC  Fee (3) 2003  2007   20%   82,441  $1,162,796  $13.38   93.4%  Publix Super Markets (2023)
 
127
  Miramar, FL River Run
Miramar Parkway & Palm Avenue		 33025 SC  Fee (3) 1989  2007   20%   93,643  $971,424  $12.79   81.1%  Publix Super Markets (2014)
 
128
  Naples, FL Carillon Place
5010 Airport Road North		 33942 SC  Fee (3) 1994  1995   14.5%   267,796  $3,157,833  $12.35   95.5%  Wal-Mart (2014), T.J. Maxx (2014), Circuit City (2015),
Ross Dress For Less (2010), Beall’s (2015), Office Max
(2010)


27

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
129
  Naples, FL Countryside
4025 Santa Barbara		 34104 SC  Fee (3) 1997  2007   20%   73,986  $851,713  $11.51   100%  Sweetbay Supermarkets (2017)
 
130
  Newport Richey, FL Shoppes of Golden Acres
9750 Little Road		 34654 SC  Fee (3) 2002  2007   20%   130,643  $1,276,767  $13.96   70%  Publix Super Markets (2022)
 
131
  Ocala, FL Heather Island
7878 S.E. Maricamp		 34472 SC  Fee (3) 2005  2007   20%   70,970  $736,383  $10.55   98.3%  Publix Super Markets (2020)
 
132
  Ocala, FL Steeplechase Plaza
8585 State Road 200		 34481 SC  Fee  1993  2007   100%   92,180  $937,612  $9.74   100%  Publix Super Markets (2013)
 
133
  Ocala, FL Ocala West
2400 S.W. College Road		 32674 SC  Fee  1991  2003   100%   105,276  $830,208  $8.30   95%  Sports Authority (2012), Hobby Lobby (2016)
 
134
  Ocoee, FL West Oaks Town Center
9537-49 West Colonial		 34761 SC  Fee (3) 2000  2007   20%   66,539  $1,128,641  $18.36   92.4%  Michaels (2010)
 
135
  Orange Park, FL The Village Shopping Center
950 Blanding Boulevard		 32065 SC  Fee  1993/2000  2004   100%   72,511  $697,556  $9.82   97.9%  Beall’s (2014), Albertson’s (Not Owned)
 
136
  Orlando, FL Chickasaw Trail
2300 South Chickasaw
Trail		 32825 SC  Fee (3) 1994  2007   20%   75,492  $807,906  $11.58   92.4%  Publix Super Markets (2014)
 
137
  Orlando, FL Circuit City Plaza
Good Homes Road & Colonial Drive		 32818 SC  Fee (3) 1999  2007   15%   78,625  $994,110  $15.12   83.6%  Staples (2015)
 
138
  Orlando, FL Conway Plaza
4400 Curry Ford Road		 32812 SC  Fee (3) 1985/1999  2007   20%   117,723  $1,002,974  $9.49   89.8%  Publix Super Markets (2019)
 
139
  Orlando, FL Sand Lake Corners
8111-8481 John Young Parkway		 32819 SC  Fee (3) 1998/2000  2007   15%   197,716  $2,350,965  $12.47   95.4%  Beall’s (2014), PetSmart (2014), Staples (2014), Wal-Mart (Not Owned), Lowe’s (Not Owned)
 
140
  Orlando, FL Skyview Plaza
7801 Orange Blossom Trail		 32809 SC  Fee (3) 1994/1998  2007   20%   281,260  $2,580,758  $9.55   96.1%  Publix Super Markets (2013), Office Depot (2008), Kmart
(2009), Circuit City (2013)
 
141
  Ormond Beach, FL Ormond Towne Square
1458 West Granada Boulevard		 32174 SC  Fee  1993  1994   100%   234,042  $2,017,796  $8.96   96.2%  Beall’s (2018), Ross Dress For Less (2016), Publix Super
Markets (2013)
 
142
  Oviedo, FL Oviedo Park Crossing
Route 417 & Red Bug Lake Road		 32765 SC  Fee (3) 1999  1*  20%   186,212  $1,682,591  $10.82   83.5%  Office Max (2014), Ross Dress For Less (2010),
Michaels(2014), T.J. Maxx (2010), Lowe’s (Not Owned)
 
143
  Palm Beach Garden, FL Northlake Commons
Northlake Boulevard		 33403 SC  Fee (3) 1987/2003  2007   20%   146,825  $2,002,632  $16.07   84.9%  Ross Dress For Less (2014), Tiger Direct (2018), Home Depot (Not Owned)


28

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
144
  Palm Harbor, FL The Shoppes of Boot Ranch
300 East Lakeroad		 34685 SC  Fee  1990  1995   100%   52,395  $957,541  $19.33   94.5%  Albertson’s (Not Owned), Target (Not Owned)
 
145
  Palm Harbor, FL Publix Brooker Creek
36301 East Lake Road		 34685 SC  Fee (3) 1994  2007   20%   77,596  $907,609  $11.85   98.7%  Publix Super Markets (2014)
 
146
  Pembroke Pines, FL Flamingo Falls
2000-2216 North Flamingo Road		 33028 SC  Fee (3) 2001  2007   20%   108,565  $2,432,870  $22.75   98.5%   
 
147
  Pensacola, FL Palafox Square
8934 Pensacola Boulevard		 32534 SC  Fee  1988/1997/
1999		  1/2*  100%   17,150  $252,813  $14.74   100%  Wal-Mart (Not Owned)
 
148
  Plant City, FL Plant City Crossing
SWC of Interstate 4 & Thonotosassa Road		 33563 SC  Fee  2001  2007   100%   85,252  $1,009,421  $12.26   96.6%  Publix Super Markets (2021)
 
149
  Plant City, FL Lake Walden Square
105-240 West Alexander		 33566 SC  Fee (3) 1992  2007   14.5%   158,347  $1,358,162  $9.81   83.2%  Kash n’ Karry (2012), Premiere Cinemas (2013)
 
150
  Plantation, FL The Fountains
801 South University Drive		 33324 SC  Fee  1989  2007   100%   223,281  $2,555,512  $17.27   65.3%  Marshalls (2014), Kohl’s (Not Owned)
 
151
  Plantation, FL Vision Works
801 South University Drive		 33324 SC  Fee  1989  2007   100%   6,891  $159,170  $23.10   100%   
 
152
  Santa Rosa Beach, FL Watercolor Crossing
110 Watercolor Way		 32459 SC  Fee (3) 2003  2007   20%   43,207  $674,060  $16.05   97.2%  Publix Super Markets (2024)
 
153
  Sarasota, FL Sarasota Pavilion
6511 Tamaimi Trail		 34231 SC  Fee (3) 1999  2007   15%   324,985  $3,905,623  $12.00   98.3%  Stein Mart (2009), Publix Super Markets (2010), Michaels (2014), Old Navy (2010), Marshalls (2013), Bed Bath & Beyond (2015), Ross Dress For Less (2012), Books-A-Million (2011)
 
154
  Spring Hill, FL Mariner Square
13050 Cortez Boulevard.		 34613 SC  Fee  1988/1997  1/2*  100%   188,347  $1,553,721  $8.32   95.6%  Beall’s (2011), Ross Dress For Less (2014), Wal-Mart (Not Owned)
 
155
  St. Petersburg, FL Kmart Plaza
3951 34th Street South		 33711 SC  Fee (3) 1973  2008   25%   94,500  $277,400  $2.94   100%  Kmart (2013)
 
156
  St. Petersburg, FL Gateway Market Center
7751-8299 9th Street North		 33702 SC  Fee (3) 2000  2007   15%   231,106  $2,045,678  $9.31   95.1%  T.J. Maxx (2014), Publix Super Markets (2019), Beall’s (2021), PetSmart (2013), Office Depot (2014), Target (Not Owned)
 
157
  Tallahassee, FL Capital West
4330 West Tennessee Street		 32312 SC  Fee  1994/2004  2003   100%   79,451  $646,711  $8.14   100%  Beall’s Outlet (2009), Office Depot (2017), Wal-Mart (Not Owned)
 
158
  Tallahassee, FL Killearn Shopping Center
3479-99 Thomasville Road		 32309 SC  Fee(3) 1980  2007   20%   95,229  $1,023,285  $11.14   96.4%  Publix Super Markets (2011)


29

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
159
  Tallahassee, FL Southwood Village
NWC Capital Circle & Blairstone Road		 32301 SC  Fee (3) 2003  2007   20%   62,840  $758,374  $12.55   96.2%  Publix Super Markets (2023)
 
160
  Tamarac, FL Midway Plaza
University Drive & Commercial Boulevard		 33321 SC  Fee (3) 1985  2007   20%   227,209  $2,808,731  $13.55   91.2%  Ross Dress For Less (2013), Publix Super Markets (2011)
 
161
  Tampa, FL New Tampa Commons 33647 SC  Fee  2005  2007   100%   10,000  $336,221  $33.62   100%   
 
162
  Tampa, FL North Pointe Plaza15001-15233North Dale Mabry 33618 SC  Fee (3) 1990  1/2*  20%   104,460  $1,300,345  $12.94   96.2%  Publix Super Markets (2010), Wal-Mart (Not Owned)
 
163
  Tampa, FL Walks at Highwood Preserve I 18001 Highwoods Preserve Parkway 33647 SC  Fee (3) 2001  2007   15%   169,081  $2,831,210  $21.31   78.6%  Michaels (2012), Circuit City (2017)
 
164
  Tampa, FL Town N’ Country Promenade
7021-7091 West Waters Avenue		 33634 SC  Fee  1990  1/2*  100%   134,463  $1,211,206  $9.40   95.8%  Kash n’ Karry (2010), Beall’s Outlet (2014), Wal-Mart (Not Owned)
 
165
  Tarpon Springs, FL Tarpon Square
41232 U.S. 19, North		 34689 SC  Fee  1974/1998  1/2*  100%   198,797  $1,451,420  $7.00   100%  Kmart (2009), Big Lots (2012), Staples (2013)
 
166
  Tequesta, FL Tequesta Shoppes
105 North U.S. Highway 1		 33469 SC  Fee  1986  2007   100%   109,760  $1,093,688  $10.89   91.5%  Stein Mart (2017)
 
167
  Vairico, FL Brandon Boulevard Shoppes
1930 State Route 60 East		 33594 SC  Fee  1994  2007   100%   85,377  $922,113  $11.62   92.9%  Publix Super Markets (2014)
 
168
  Vairico, FL Shoppes at Lithia
3461 Lithia Pinecrest Road		 33594 SC  Fee (3) 2003  2007   20%   71,430  $1,045,200  $15.64   93.6%  Publix Super Markets (2023)
 
169
  Venice, FL Jacaranda Plaza
1687 South Bypass		 34293 SC  Fee (3) 1974  2008   25%   84,180  $256,500  $3.05   100%  Kmart (2009)
 
170
  Vero Beach, FL Circuit City - Vero Beach
6560 20th Street		 32966 SC  Fee  2001  2007   100%   33,243  $530,000  $15.94   100%   
 
171
  Wesley Chapel, FL Shoppes of New Tampa
1920 County Road 581		 33543 SC  Fee (3) 2002  2007   20%   158,602  $1,972,649  $12.98   95.9%  Publix Super Markets (2022), Beall’s (2017)
 
172
  West Palm Beach, FL Paradise Place
4075 N. Haverhill Road		 33417 SC  Fee (3) 2003  2007   15%   89,120  $909,707  $11.01   92.7%  Publix Super Markets (2023)
 
173
  Winter Park, FL Winter Park Palms
4270 Aloma Avenue		 32792 SC  Fee (3) 1990  2007   14.5%   112,292  $887,733  $10.95   72.2%  Publix Super Markets (2010)
    Georgia                                      
 
174
  Athens, GA Athens East
4375 Lexington Road		 30605 SC  Fee  2000  2003   100%   24,000  $323,904  $15.00   90%  Wal Mart (Not Owned)
 
175
  Atlanta, GA Brookhaven Plaza
3974 Peachtree Road N.E.		 30319 SC  Fee (3) 1993  2007   20%   65,320  $1,186,135  $16.93   100%  Kroger (2018)
 
176
  Atlanta, GA Cascade Corners
3425 Cascade Road		 30311 SC  Fee(3) 1993  2007   20%   66,844  $475,836  $7.12   100%  Kroger (2020)


30

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
177
  Atlanta, GA Pleasant Hill Plaza
1630 Pleasant Hill Road		 30136 SC  Fee  1990  1994   100%   99,025  $674,769  $11.00   62%  Wal-Mart (Not Owned)
 
178
  Atlanta, GA Perimeter Pointe
1155 Mount Vernon Highway		 30136 SC  Fee (3) 1995/2002  1995   14.5%   343,155  $5,464,451  $15.12   100%  Stein Mart (2010), Babies “R” Us (2012), Sports Authority (2012), L.A. Fitness (2016), Office Depot (2012), Homegoods (2018), United Artists Theatre (2015)
 
179
  Atlanta, GA Abernathy Square
6500 Roswell Road		 30328 SC  Fee  1983/1994  2007   100%   127,616  $2,223,604  $19.74   85.1%  Publix Super Markets (2014)
 
180
  Atlanta, GA Cascade Crossing
3695 Cascade Road S.W.		 30331 SC  Fee (3) 1994  2007   20%   63,346  $605,375  $9.56   100%  Publix Super Markets (2014)
 
181
  Augusta, GA Goody’s Shopping Center
2360 Georgetown Road		 30906 SC  Fee (3) 1999  2007   15%   22,560  $0  $0.00   0%  Super Wal-Mart (Not Owned)
 
182
  Austell, GA Burlington Plaza
3753-3823 Austell Road S.W.		 30106-1106 SC  Fee (3) 1973  2008   25%   146,950  $487,041  $3.39   97.8%  Burlington Coat Factory (2014)
 
183
  Buford, GA Marketplace at Millcreek I
Mall of Georgia Boulevard		 30519 SC  Fee (3) 2003  2007   15%   403,106  $4,552,852  $12.86   87.8%  Toys “R” Us (2015), R.E.I. (2013), Borders (2020), Office Max (2014), PetSmart (2015), Michaels (2010), DSW Shoe Warehouse (2013), Ross Dress For Less (2013), Marshalls (2012)
 
184
  Canton, GA Hickory Flat Village
6175 Hickory Flat Highway		 30115 SC  Fee (3) 2000  2007   20%   74,020  $962,939  $13.32   97.6%  Publix Super Markets (2020)
 
185
  Canton, GA Riverstone Plaza
1451 Riverstone Parkway		 30114 SC  Fee (3) 1998  2007   20%   302,131  $3,538,948  $11.63   97.4%  Goody’s (2010), Michaels (2012), Ross Dress For Less (2012),
Belk (2017), Publix Super Markets (2018)
 
186
  Cartersville, GA Bartow Marketplace
215 Marketplace Boulevard		 30121 SC  Fee (3) 1995  2007   15%   375,067  $2,450,678  $6.59   99.2%  Wal-Mart (2015), Lowe’s (2015)
 
187
  Chamblee, GA Chamblee Plaza
Peachtree Industrial Boulevard		 30341 SC  Fee  1976  2003   100%   147,016  $668,716  $12.24   37.2%   
 
188
  Columbus, GA Bradley Park Crossing 1591 Bradley Park Drive Columbia 31904 SC  Fee  1999  2003   100%   119,786  $1,339,143  $11.41   98%  Goody’s (2011), PetSmart (2015), Michaels (2009), Target (Not Owned)
 
189
  Cumming, GA Sharon Greens
1595 Peachtree Parkway		 30041 SC  Fee (3) 2001  2007   20%   98,301  $1,109,793  $12.34   91.5%  Kroger (2021)


31

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
190
  Cumming, GA Cumming Marketplace
Marketplace Boulevard		 30041 SC  Fee  1997/1999  2003   100%   308,557  $3,344,883  $11.75   88.2%  Lowe’s (2019), Michaels (2010), Office Max (2013), Wal-Mart (Not Owned), Home Depot (Not Owned)
 
191
  Decatur, GA Flat Shoals Crossing
3649 Flakes Mill Road		 30034 SC  Fee (3) 1994  2007   20%   69,699  $711,118  $10.20   100%  Publix Super Markets (2013)
 
192
  Decatur, GA Hairston Crossing
2075 South Hairston Road		 30035 SC  Fee (3) 2002  2007   20%   57,884  $701,163  $12.11   100%  Publix Super Markets (2022)
 
193
  Douglasville, GA Douglasville Marketplace
6875 Douglas Boulevard		 30135 SC  Fee  1999  2003   100%   86,158  $1,461,499  $10.54   100%  Best Buy (2015), Babies “R” Us (2011), Lowe’s (Not Owned)
 
194
  Douglasville, GA Douglas Pavilion
2900 Chapel Hill Road		 30135 SC  Fee (3) 1998  2007   15%   267,010  $2,980,628  $11.56   96.6%  PetSmart (2014), Office Max (2013), Marshalls (2014),
Goody’s (2013), Ross Dress For Less (2012), Hudson’s
Furniture Showroom (2014), Target (Not Owned)
 
195
  Douglasville, GA Market Square
9503-9579 Highway 5		 30135 SC  Fee (3) 1974/1990  2007   20%   121,766  $1,413,068  $11.86   93.3%  Office Depot (2013)
 
196
  Duluth, GA Venture Pointe I
2050 West Liddell Road		 30096 SC  Fee (3) 1996  2007   15%   335,420  $2,408,764  $8.39   85.6%  Hobby Lobby (2011), Babies “R” Us (2014), Ashley Furniture Homestore (2012), Golfsmith Golf Center (2012), Kohl’s (2022), Costco (Not Owned), Super Target (Not Owned)
 
197
  Duluth, GA Sofa Express
3480 Steve Reynolds Boulevard		 30096 SC  Fee  2004  2007   100%   20,000  $0  $0.00   0%   
 
198
  Duluth, GA Pleasant Hill
2205 Pleasant Hill		 30096 SC  Fee (3) 1997/2000  2007   15%   282,137  $3,591,471  $12.91   98.6%  Barnes & Noble (2012), Toys “R” Us (2013), Staples (2014), JCPenney (2012), Old Navy (2009), Jo-Ann Stores (2011)
 
199
  Ellenwood, GA Shoppes of Ellenwood
East Atlanta Road & Fairview Road		 30294 SC  Fee (3) 2003  2007   20%   67,721  $778,235  $13.12   87.6%  Publix Super Markets (2023)


32

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
200
  Fayetteville, GA Fayette Pavilion I
New Hope Road & GA Highway 85		 30214 SC  Fee (3) 1995/2002  2007   15%   1,279,810  $11,310,519  $9.82   90%  H.H. Gregg Appliances (2018), Wal-Mart (2016), Bed Bath & Beyond (2013), Sports Authority (2012), T.J. Maxx (2009), Publix Super Markets (2016), Belk (2015), Best Buy (2013), Hudson’s Furniture Showroom (2016), Old Navy (2010), Ross Dress For Less (2012), Toys “R” Us (2010), Cinemark (2018), Marshalls (2011), PetSmart (2016), Kohl’s (2022), Jo-Ann Stores (2012), Dick’s Clothing and Sporting Goods (2016), Target (Not Owned), Home Depot (Not Owned)
 
201
  Flowery Branch, GA Clearwater Crossing
7380 Spout Springs Road		 30542 SC  Fee (3) 2003  2007   20%   90,566  $1,082,925  $12.85   93%  Kroger (2023)
 
202
  Gainesville, GA Rite Aid
599 South Enota Drive		 30501 SC  Fee  1997  2007   100%   10,594  $178,016  $16.80   100%   
 
203
  Hiram, GA Hiram Pavilion I
5220 Jimmy Lee Smith Parkway		 30141 SC  Fee (3) 2002  2007   15%   363,695  $2,825,070  $10.11   76.8%  Ross Dress For Less (2012), Michaels (2012), Marshalls (2011), Kohl’s (2022), Target (Not Owned)
 
204
  Kennesaw, GA Barrett Pavilion I
740 Barrett Parkway		 30144 SC  Fee (3) 1998  2007   15%   439,784  $6,593,189  $15.96   90.2%  AMC Theatre (2019), Homegoods (2013), The School Box (2010), Golfsmith Golf Center (2013), H.H. Gregg Appliances (2018), Jo-Ann Stores (2011), Old Navy (2010), Rei (2018), Total Wine & More (2017), Target (Not Owned)
 
205
  Kennesaw, GA Town Center Commons
725 Earnest Barrett Parkway		 30144 SC  Fee  1998  2007   100%   72,108  $986,345  $14.99   91.3%  JCPenney (2013), Dick’s Clothing and Sporting Goods (Not Owned)
 
206
  Lawrenceville, GA Five Forks Village
850 Dogwood Road		 30044 SC  Fee (3) 1990  2003   10%   89,064  $447,152  $16.06   31.3%   


33

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
207
  Lawrenceville, GA Rite Aid
1545 Lawrenceville Highway		 30044 SC  Fee  1997  2007   100%   9,504  $184,328  $19.39   100%   
 
208
  Lawrenceville, GA Springfield Park
665 Duluth Highway		 30045 SC  Fee  1992/2000  2007   100%   105,321  $933,601  $10.11   75.7%  Hobby Lobby (2011)
 
209
  Lilburn, GA Five Forks Crossing
3055 Five Forks Trickum Road		 30047 SC  Fee (3) 2000/2001  2003   10%   73,910  $717,812  $9.71   100%  Kroger (2012)
 
210
  Lithonia, GA Stonecrest Marketplace
Turner Hill Road and Mall Parkway		 30038 SC  Fee (3) 2002  2007   15%   264,584  $2,942,984  $12.80   86.9%  Staples (2017), Babies “R” Us (2018), DSW Shoe Warehouse (2013), Ross Dress For Less (2013), Marshalls (2012)
 
211
  Lithonia, GA The Shops at Turner Hill
8200 Mall Parkway		 30038 SC  Fee (3) 2004  2003   14.5%   113,675  $1,560,075  $13.19   95.4%  Best Buy (2018), Bed Bath & Beyond (2013), Toys “R” Us (2012), Sam’s Club (Not Owned)
 
212
  Loganville, GA Midway Plaza
910 Athens Highway		 30052 SC  Fee (3) 1995  2003   20%   91,196  $1,044,574  $11.45   100%  Kroger (2016)
 
213
  Macon, GA Eisenhower Annex
4685 Presidential Parkway		 31206 SC  Fee  2002  2007   100%   55,505  $688,453  $12.40   100%  H.H. Gregg Appliances (2036)
 
214
  Macon, GA Eisenhower Outlot (David’s Bridal)
4685 Presidential Parkway		 31206 SC  Fee (3) 2004  2007   15%   14,000  $247,665  $19.42   91.1%   
 
215
  Macon, GA Eisenhower Crossing I
4685 Presidential Parkway		 31206 SC  Fee (3) 2002  2007   15%   400,556  $4,311,437  $11.79   89.3%  Kroger (2022), Staples (2016), Michaels (2011), Ross Dress For Less (2012), Bed Bath & Beyond (2012), Old Navy (2011), Marshalls (2011), Dick’s Clothing and Sporting Goods (2017), Target (Not Owned)
 
216
  Macon, GA Kmart
1901 Paul Walsh Drive		 31206 SC  Fee  2000  2007   100%   102,098  $0  $0.00   0%   
 
217
  Marietta, GA Towne Center Prado
2609 Bells Ferry Road		 30066 SC  Fee (3) 1995/2002  1995   14.5%   316,786  $4,041,430  $12.92   97.3%  Stein Mart (2012), Ross Dress For Less (2013), Publix Super
Markets (2015), Crunch Fitness (2011)
 
218
  Marietta, GA Rite Aid
731 Whitlock Avenue		 30064 SC  Fee  1997  2007   100%   10,880  $183,507  $16.87   100%   
 
219
  Marietta, GA Blockbuster
1748 Powder Springs		 30064 SC  Fee (3) 1994  2007   20%   6,500  $128,960  $19.84   100%   


34

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
220
  McDonough, GA McDonough Marketplace (LP-II) N.E. Corner
175 & Highway 20		 30253 SC  Fee (3) 2003  2003   14.5%   53,158  $831,109  $13.77   94.7%  Office Depot (2016), Lowe’s (Not Owned), Wal-Mart (Not
Owned)
 
221
  McDonough, GA Shoppes at Lake Dow
900-938 Highway 81 East		 30252 SC  Fee (3) 2002  2007   20%   73,145  $870,478  $12.89   92.3%  Publix Super Markets (2022)
 
222
  Morrow, GA Southlake Pavilion
1912 Mount Zion Road		 30260 SC  Fee (3) 1996/2001  2007   15%   530,066  $4,476,109  $13.04   64.8%  Ross Dress For Less (2012), Barnes & Noble (2013), Ashley Furniture Homestore (2012), L.A. Fitness (2017), Staples (2015), Old Navy (2011), H.H. Gregg Appliances (2018), Sears (2012), Target (Not Owned)
 
223
  Newnan, GA Newnan Crossing
955-1063 Bullsboro Drive		 30264 SC  Fee  1995  2003   100%   156,497  $1,283,643  $8.36   98.1%  Lowe’s (2015), Belk (Not Owned), Wal-Mart (Not Owned)
 
224
  Newnan, GA Newnan Pavilion
1074 Bullsboro Drive		 30265 SC  Fee (3) 1998  2007   15%   263,705  $3,353,273  $12.18   91.1%  Office Max (2013), PetSmart (2015), Home Depot (2019), Ross Dress For Less (2012), Kohl’s (2022)
 
225
  Norcross, GA Jones Bridge Square
5075 Peachtree Parkway		 30092 SC  Fee  1999  2007   100%   83,363  $857,412  $10.29   100%  Ingles (2019)
 
226
  Rome, GA Circuit City - Rome
2700 Martha Berry Highway N.E.		 30165 SC  Fee  2001  2007   100%   33,056  $420,000  $12.71   100%  Circuit City (2021)
 
227
  Roswell, GA Sandy Plains Village I
Georgia Highway
92 & Sandy Plains Road		 30075 SC  Fee  1978/1995  2007   100%   177,599  $1,435,004  $10.23   79%  Kroger (2010), Stein Mart (2009)
 
228
  Roswell, GA Stonebridge Square
610-20 Crossville Road		 30075 SC  Fee (3) 2002  2007   15%   160,104  $1,707,168  $14.09   75.7%  Kohl’s (2022)
 
229
  Smyrna, GA Heritage Pavilion
2540 Cumberland Boulevard		 30080 SC  Fee (3) 1995  2007   15%   262,971  $3,105,106  $12.63   93.5%  PetSmart (2016), Ross Dress For Less (2016), American Signature (2018), T.J. Maxx (2010), Marshalls (2011)
 
230
  Snellville, GA Rite Aid
3295 Centerville Highway		 30039 SC  Fee  1997  2007   100%   10,594  $199,601  $18.84   100%   
 
231
  Snellville, GA Presidential Commons1630-1708Scenic Highway 30078 SC  Fee  2000  2007   100%   371,586  $3,864,584  $10.98   91.9%  Jo-Ann Stores (2014), Kroger (2018), Stein Mart (2013),
Home Depot (2023)


35

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
232
  Stone Mountain, GA Deshon Plaza
380 North Deshon Road		 30087 SC  Fee (3) 1994  2007   20%   64,055  $706,838  $11.03   100%  Publix Super Markets (2014)
 
233
  Suwanee, GA Suwanee Crossroads
Lawrenceville Road & Satellite Boulevard		 30024 SC  Fee (3) 2002  2007   15%   69,600  $733,165  $17.16   61.4%  Super Wal-Mart (Not Owned)
 
234
  Suwanee, GA Johns Creek Town Center
3630 Peachtree Parkway Suwanee		 30024 SC  Fee  2001/2004  2003   100%   285,336  $3,735,980  $13.57   96.5%  Borders (2021), PetSmart (2020), Kohl’s (2022),
Michaels(2011), Staples (2016), Shoe Gallery (2014)
 
235
  Suwanee, GA The Shops at Johns Creek
4090 Johns Creek Parkway		 30024 SC  Fee (3) 1997  2007   20%   18,200  $359,504  $19.75   100%   
 
236
  Sylvania, GA BI-LO - Sylvania
1129 West Ogeechee Street		 30467 SC  Fee  2002  2007   100%   36,000  $378,000  $10.50   100%  BI-LO (2023)
 
237
  Tucker, GA Cofer Crossing
4349-4375 Lawrenceville Highway		 30084 SC  Fee(3) 1998/2003  2003   20%   130,832  $835,781  $8.15   72.8%  Kroger (2019), Wal-Mart (Not Owned)
 
238
  Tyrone, GA Southampton Village
NWC of Highway 74 & Swanson Road		 30290 SC  Fee (3) 2003  2007   20%   77,956  $923,248  $12.76   92.8%  Publix Super Markets (2023)
 
239
  Union City, GA Shannon Square
4720 Jonesboro Road		 30291 SC  Fee  1986  2003   100%   100,002  $528,588  $7.65   69.1%  Wal-Mart (Not Owned)
 
240
  Warner Robins, GA Warner Robins Place
2724 Watson Boulevard		 31093 SC  Fee  1997  2003   100%   107,941  $1,348,764  $12.00   97.8%  T.J. Maxx (2010), Staples (2016), Wal-Mart (Not Owned), Lowe’s (Not Owned)
 
241
  Warner Robins, GA City Crossing
Watson Boulevard & Carl Vinson
Parkway		 31093 SC  Fee(3) 2001  2007   15%   190,433  $1,659,423  $11.33   76.9%  Michaels(2011), Ross Dress For Less (2012), Old Navy
(2011), Home Depot (Not Owned)
 
242
  Warner Robins, GA Lowe’s Home Improvement
2704 Watson Boulevard		 31093 SC  Fee  2000  2007   100%   131,575  $910,000  $6.92   100%  Lowe’s (2017)
 
243
  Woodstock, GA Woodstock Place
10029 Highway 928		 30188 SC  GL  1995  2003   100%   44,691  $388,950  $11.01   79.1%   
 
244
  Woodstock, GA Woodstock Square
120-142 Woodstock Square		 30189 SC  Fee(3) 2001  2007   15%   218,859  $2,878,003  $13.15   100%  Office Max (2017), Old Navy (2012), Kohl’s (2022), Super
Target (Not Owned)
    Idaho                                      
 
245
  Idaho Falls, ID Country Club Mall
1515 Northgate Mile		 83401 SC  Fee  1976/1992/
1997		  1998   100%   148,593  $830,546  $7.45   75%  Office Max (2011), World Gym (2008), Fred Meyer, Inc. (Not Owned)


36

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
246
  Meridian, ID Meridian Crossroads
Eagle & Fairview Road		 83642 SC  Fee  1999/2001/
2002/2003		  1*  100%   461,023  $6,600,607  $12.89   100%  Bed Bath & Beyond (2011), Old Navy (2010), ShopKo (2020), Office Depot (2010), Ross Dress For Less (2012), Marshalls (2012), Sportsman’s Warehouse (2015), Babies “R” Us (2014), Craft Warehouse (2013), Wal-Mart (Not Owned)
 
247
  Nampa, ID Nampa Gateway Center
1200 North Happy Valley Road		 83687 SC  Fee  2008  1*  100%   103,109  $92,500  $0.90   100%  JCPenney (2027)
    Illinois                                      
 
248
  Deer Park, IL Deer Park Town Center
20530 North Rand Road		 60010 LC  Fee(3) 2000/2004  1*  25.75%   292,139  $8,960,205  $29.64   95.5%  Gap (2010), Crate & Barrel (2018), Century Theatre (2019), Barnes & Noble (Not Owned)
 
249
  McHenry, IL The Shops at Fox River
3340 Shoppers Drive		 60050 SC  Fee  2006  1*  100%   224,552  $2,713,999  $14.93   80.9%  Dick’s Clothing and Sporting Goods (2018), PetSmart (2017), Bed Bath & Beyond (2017), Best Buy (2018)
 
250
  Mount Vernon, IL Times Square Mall
42nd & Broadway		 62864 MM  Fee  1974/1998/
2000		  1993   100%   269,328  $1,013,957  $4.36   81.7%  Sears (2013), Goody’s (2015), JCPenney (2012)
 
251
  Orland Park, IL Marley Creek Square
179th Street & Wolf Road		 60467 SC  Fee(3) 2006  2006   50%   57,927  $778,029  $20.09   66.9%   
 
252
  Orland Park, IL Home Depot Center
15800 Harlem Avenue		 60462 SC  Fee  1987/1993  2004   100%   149,498  $1,469,735  $10.48   93.8%  Home Depot (2012)
 
253
  Rockford, IL Walgreens - Rockford
2525 South Alpine Road		 61108 SC  Fee  1998/1999  2007   100%   14,725  $350,000  $23.77   100%   
 
254
  Roscoe, IL Hilander Village
4860 Hononegah Road		 61073 SC  Fee(3) 1994  2007   20%   125,623  $1,030,131  $9.61   85.3%  Kroger (2020)
 
255
  Schaumburg, IL Woodfield Village Green 1430 East
Golf Road		 60173 SC  Fee(3) 1993/1998/
2002		  1995   14.5%   508,673  $8,591,760  $17.26   97.9%  Circuit City (2009), Off 5th (2011), PetSmart (2014),
Homegoods (2014), Office Max (2010), Container Store
(2011), Filene’s Basement (2014), Marshalls (2014),
Nordstrom Rack (2014), Borders (2010), Expo Design Center (2019), Costco (Not Owned)


37

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
256
  Skokie, IL Village Crossing
5507 West Touhy Avenue		 60077 SC  Fee(3) 1989  2007   15%   434,973  $7,564,780  $18.79   91.1%  Michaels(2013), Bed Bath & Beyond (2013), Office Max
(2015), Best Buy (2014), Crown Theatres (2021), Barnes & Noble (2012), PetSmart (2019)
    Indiana                                      
 
257
  Bedford, IN Town Fair Center
1320 James Avenue		 47421 SC  Fee  1993/1997  2*  100%   223,431  $1,153,104  $6.20   83.2%  Kmart (2018), Goody’s (2013), JCPenney (2013)
 
258
  Evansville, IN East Lloyd Commons
6300 East Lloyd Expressway		 47715 SC  Fee  2005  2007   100%   159,682  $2,128,800  $13.82   96.5%  Gordman’s (2015), Michaels(2015), Best Buy (2016)
 
259
  Highland, IN Highland Grove Shopping Center Highway 41 & Main Street 46322 SC  Fee(3) 1995/2001  1996   20%   312,546  $3,158,223  $11.51   87.8%  Marshalls (2011), Kohl’s (2016), Office Max (2012), Jewel (Not Owned), Target (Not Owned)
 
260
  Indianapolis, IN Glenlake Plaza
2629 East 65th Street		 46220 SC  Fee(3) 1980  2007   20%   102,549  $784,890  $9.15   83.6%  Kroger (2020)
 
261
  Lafayette, IN Park East Marketplace
4205 - 4315 Commerce Drive		 47905 SC  Fee  2000  2003   100%   35,100  $279,107  $14.76   53.9%  Wal-Mart (Not Owned)
 
262
  South Bend, IN Broadmoor Plaza
1217 East Ireland Road		 46614 SC  Fee(3) 1987  2007   20%   114,968  $1,274,309  $11.59   95.6%  Kroger (2020)
    Iowa                                      
 
263
  Cedar Rapids, IA Northland Square
303 -367 Collins Road, N.E.		 52404 SC  Fee  1984  1998   100%   187,068  $1,885,609  $10.08   100%  T.J. Maxx (2010), Office Max (2010), Barnes & Noble (2010), Kohl’s (2021)
 
264
  Ottumwa, IA Quincy Place Mall
1110 Quincy Avenue		 52501 MM  Fee  1990/1999/
2002		  1/2*  100%   241,427  $1,275,295  $6.47   81.6%  Herberger’s (2010), JCPenney (2010), Goody’s (2014), Target (Not Owned)
    Kansas                                      
 
265
  Leawood, KS Town Center Plaza
5000 West 119th Street		 66209 LC  Fee  1996/2002  1998   100%   309,423  $8,209,005  $27.28   94.8%  Barnes & Noble (2016), Macy’s (2104)
 
266
  Merriam, KS Merriam Town Center
5700 Antioch Road		 66202 SC  Fee(3) 1998/2004  1*  14.5%   351,244  $4,199,393  $12.33   96.9%  Cinemark (2018), Office Max (2013), PetSmart (2019), Hen
House (2018), Marshalls (2014), Dick’s Clothing and
Sporting Goods (2016), Home Depot (Not Owned)


38

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
267
  Overland Park, KS Overland Pointe Marketplace
Intersection 135 & Antioch Road		 66213 SC  Fee(3) 2001/2004  2003   14.5%   42,632  $886,738  $17.63   98.3%  Babies “R” Us (2015), Home Depot (Not Owned), Sam’s Club (Not Owned)
 
268
  Wichita, KS Eastgate Plaza
South Rock Road		 67207 SC  Fee  1955  2002   100%   205,114  $1,958,102  $12.20   81.1%  Burlington Coat Factory (2017), Office Max (2010), T.J. Maxx (2011), Barnes & Noble (2012), Toys “R” Us (Not Owned)
    Kentucky                                      
 
269
  Lexington, KY North Park Marketplace
524 West New Circle		 40511 SC  Fee  1998  2003   100%   46,647  $687,946  $14.75   100%  Staples (2016), Wal-Mart (Not Owned)
 
270
  Lexington, KY South Farm Marketplace
Man-O-War Boulevard & Nichol		 40503 SC  Fee  1998  2003   100%   27,643  $621,548  $22.48   100%  Lowe’s (Not Owned), Wal-Mart (Not Owned)
 
271
  Louisville, KY Outer Loop Plaza
7505 Outer Loop Highway		 40228 SC  Fee  1973/1989/
1998		  2004   100%   120,777  $621,982  $6.04   85.3%  Valu Discount (2009)
 
272
  Richmond, KY Carriage Gate
833-847 Eastern By-Pass		 40475 SC  Fee  1992  2003   100%   147,929  $618,660  $5.50   76%  Office Depot (2016), Hobby Lobby (2018), Dunham’s Sporting Goods (2015), Ballard’s (Not Owned)
    Louisiana                                      
 
273
  Covington, LA Covington Corners
782 North Highway 190		 70433 SC  Fee  1999  2007   100%   15,590  $249,440  $16.00   100%   
    Maine                                      
 
274
  Brunswick, ME Cook’s Corners
172 Bath Road		 04011 SC  GL  1965  1997   100%   301,853  $2,269,139  $8.06   89.1%  Hoyts Cinemas (2010), Big Lots (2013), T.J. Maxx (2010), Sears (2012)
    Maryland                                      
 
275
  Bowie, MD Duvall Village
4825 Glenn Dale Road		 20720 SC  Fee  1998  2007   100%   88,022  $1,452,226  $16.74   98.6%  Super Fresh (2020)
 
276
  Glen Burnie, MD Harundale Plaza
7440 Ritchie Highway		 21061 SC  Fee(3) 1999  2007   20%   217,619  $2,738,388  $12.58   100%  A & P Company (2019), A.J. Wright (2009), Burlington Coat Factory (2018)
 
277
  Hagerstown, MD Valley Park Commons
1520 Wesel Boulevard		 21740 SC  Fee  1993/2006  2007   100%   86,190  $1,114,255  $13.73   94.2%  Office Depot (2016)
 
278
  Salisbury, MD The Commons
East North Point Drive		 21801 SC  Fee  2000  2006   100%   126,135  $1,812,894  $13.75   100%  Best Buy (2013), Michaels(2009), Home Depot (Not Owned),
Target (Not Owned)


39

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
279
  Upper Marlboro, MD Largo Towne Center
950 Largo Center Drive		 20774 SC  Fee(3) 1991  2007   20%   260,797  $3,754,170  $12.33   97.8%  Shoppers Food Warehouse (2009), Marshalls (2011), Regency Furniture (2017)
 
280
  White Marsh, MD Costco Plaza
9919 Pulaski Highway		 21220 SC  Fee(3) 1987/1992  2007   15%   187,331  $1,654,093  $8.12   100%  Costco Wholesale (2011), PetSmart (2010), Pep Boys (2012), Sports Authority (2011), Home Depot (Not Owned)
    Massachusetts                                      
 
281
  Everett, MA Gateway Center
1 Mystic View Road		 02149 SC  Fee  2001  1*  100%   222,236  $4,738,699  $17.09   100%  Home Depot (2031), Bed Bath & Beyond (2011), Old Navy (2011), Office Max (2020), Babies “R” Us (2013),
Michaels(2012), Costco (Not Owned), Target (Not Owned)
 
282
  Framingham, MA Shoppers World
1 Worcester Road		 01701 SC  Fee(3) 1994  1995   14.5%   769,276  $14,682,596  $18.79   100%  Toys “R” Us (2020), Macy’s (2020), T.J. Maxx (2010), Babies “R” Us (2013), DSW Shoe Warehouse (2017), A.C. Moore (2012), Marshalls (2011), Bob’s Stores (2011), Sports Authority (2015), PetSmart (2011), Best Buy (2014), Barnes & Noble (2011), AMC Theatre (2014), Kohl’s (2010)
 
283
  West Springfield, MA Riverdale Shops
935 Riverdale Street		 01089 SC  Fee(3) 1985/2003  2007   20%   273,532  $3,407,088  $12.99   95.9%  Kohl’s (2024), Stop & Shop (2016)
 
284
  Worcester, MA Sam’s Club
301 Barber Avenue		 01606 SC  Fee  1998  2007   100%   107,929  $1,116,581  $10.35   100%  Sam’s Club (2013)
    Michigan                                      
 
285
  Bad Axe, MI Huron Crest Plaza
850 North Van Dyke Road		 48413 SC  Fee  1991  1993   100%   63,415  $144,425  $8.86   25.7%  Wal-Mart (Not Owned)
 
286
  Benton Harbor, MI Fairplain Plaza
1000 Napier Avenue		 49022 SC  Fee(3) 1998  2006   20%   260,166  $2,267,059  $11.03   79%  Office Depot (2008), T.J. Maxx (2014), PetSmart (2018), Target (Not Owned), Kohl’s (Not Owned)
 
287
  Cheboygan, MI Kmart Shopping Plaza
1109 East State		 49721 SC  Fee  1988  1994   100%   70,076  $261,399  $3.73   100%  Kmart (2010)


40

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
288
  Dearborn Heights, MI Walgreens
8706 North Telegraph Road		 48127 SC  Fee  1998/1999  2007   100%   13,905  $385,510  $27.72   100%   
 
289
  Detroit, MI Belair Centre
8400 East Eight Mile Road		 48234 SC  GL  1989/2002  1998   100%   343,619  $1,857,951  $9.33   62.8%  Phoenix Theaters (2013), Kids “R” Us (2013), Forman Mills
(2012), Target (Not Owned)
 
290
  Gaylord, MI Pine Ridge Square
1401 West Main Street		 49735 SC  Fee  1991/2004  1993   100%   188,386  $595,323  $4.61   68.6%  Dunham’s Sporting Goods (2011), Big Lots (2010), Bosmans’s Mercantile (2018)
 
291
  Grand Rapids, MI Green Ridge Square
3390-B Alpine Avenue N.W.		 49504 SC  Fee  1989  1995   100%   133,538  $1,614,065  $12.29   98.4%  T.J. Maxx (2011), Office Depot (2010), Target (Not Owned), Toys “R” Us (Not Owned)
 
292
  Grand Rapids, MI Green Ridge Square
3410 Alpine Avenue		 49504 SC  Fee  1991/1995  2004   100%   91,749  $1,002,669  $11.98   91.2%  Circuit City (2010), Bed Bath & Beyond (2015)
 
293
  Grandville, MI Grandville Marketplace
Intersection 44th Street & Canal
Avenue		 49418 SC  Fee(3) 2003  2003   14.5%   201,726  $2,283,003  $12.99   84.1%  Circuit City (2017), Gander Mountain (2016), Office Max
(2013), Lowe’s (Not Owned)
 
294
  Houghton, MI Copper Country Mall
Highway M26		 49931 MM  Fee  1981/1999  1/2*  100%   257,863  $462,000  $4.42   40.5%  JCPenney (2010), Office Max (2014)
 
295
  Howell, MI Grand River Plaza 3599 East Grand River 48843 SC  Fee  1991  1993   100%   214,501  $1,511,475  $7.42   94.9%  Elder-Beerman (2011), Dunham’s Sporting Goods (2011), Office Max (2017), T.J. Maxx (2017)
 
296
  Lansing, MI Marketplace at Delta Township 8305 West Saginaw Highway 196 Ramp 48917 SC  Fee  2000/2001  2003   100%   135,697  $1,443,522  $11.10   95.9%  Michaels(2011), Gander Mountain (2015), Staples (2016), PetSmart (2016), Wal-Mart (Not Owned), Lowe’s (Not Owned)
 
297
  Livonia, MI Walgreens - Livonia
29200 6 Mile Road		 48152 SC  Fee  1998/1999  2007   100%   13,905  $269,061  $19.35   100%   
 
298
  Milan, MI Milan Plaza
531 West Main Street		 48160 SC  Fee(3) 1955  2007   20%   65,764  $305,268  $4.64   100%  Kroger (2020)
 
299
  Mount Pleasant, MI Indian Hills Plaza
4208 East Blue Grass Road		 48858 SC  Fee  1990  2*  100%   249,680  $813,197  $7.80   41.7%  T.J. Maxx (2014), Kroger (2011)
 
300
  Port Huron, MI Walgreens
NWC 10th Street & Oak Street		 48060 SC  Fee  2000  2007   100%   15,120  $359,856  $23.80   100%   


41

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
301
  Sault St. Marie, MI Cascade Crossing
4516 I-75 Business Spur		 49783 SC  Fee  1993/1998  1994   100%   270,761  $1,700,474  $6.47   97.1%  Wal-Mart (2012), JCPenney (2013), Dunham’s Sporting Goods (2011), Glen’s Market (2013)
 
302
  Westland, MI Walgreens
7210 North Middlebelt		 48185 SC  Fee  2005  2007   100%   13,905  $285,053  $20.50   100%   
    Minnesota                                      
 
303
  Bemidji, MN Paul Bunyan Mall
1201 Paul Bunyan Drive		 56601 MM  Fee  1977/1998  2*  100%   297,803  $1,654,150  $5.78   96.2%  Kmart (2012), Herberger’s (2010), JCPenney (2013)
 
304
  Brainerd, MN Westgate Mall
14136 Baxter Drive		 56425 MM  Fee  1985/1998  1/2*  100%   260,319  $1,477,039  $8.89   63.8%  Herberger’s (2013), Movies 10 (2011)
 
305
  Coon Rapids, MN Riverdale Village
12921 Riverdale Drive		 55433 SC  Fee(3) 2003  1*  14.5%   551,867  $9,181,673  $15.73   94.7%  Kohl’s (2020), Jo-Ann Stores (2010), Borders (2023), Old
Navy (2012), Sears (2017), Sportsman’s Warehouse (2017), Best Buy (2013), JCPenney (2024), DSW Shoe Warehouse (2016), Costco (Not Owned)
 
306
  Eagan, MN Eagan Promenade
1299 Promenade Place		 55122 SC  Fee(3) 1997/2001  1997   50%   278,211  $3,778,749  $13.58   100%  Byerly’s (2016), PetSmart (2018), Barnes & Noble (2012), Office Max (2013), T.J. Maxx (2013), Bed Bath & Beyond
(2012), Ethan Allen Furniture (Not Owned)
 
307
  Maple Grove, MN Maple Grove Crossing
Weaver Lake Road & I-94		 55369 SC  Fee(3) 1995/2002  1996   50%   265,957  $3,059,883  $11.51   100%  Kohl’s (2016), Barnes & Noble (2011), Gander Mountain (2011), Michaels(2012), Bed Bath & Beyond (2012), Cub Foods
(Not Owned)
 
308
  St. Paul, MN Midway Marketplace
1450 University Avenue West		 55104 SC  Fee(3) 1995  1997   14.5%   324,354  $2,698,033  $8.32   100%  Wal-Mart(2022), Cub Foods(2015), PetSmart(2011), LA Fitness
International(2023), Borders Books And Music(Not Owned), Herberger’S(Not Owned)


42

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
    Mississippi                                      
 
309
  Gulfport, MS Crossroads Center
Crossroads Parkway		 39503 SC  GL  1999  2003   100%   423,507  $5,617,321  $11.56   99.7%  Academy Sports (2015), Bed Bath & Beyond (2014), Ross Dress For Less (2015), Goody’s (2011), T.J. Maxx (2009), Cinemark (2019), Office Depot (2014), Belk (2024), Barnes & Noble
(2015)
 
310
  Jackson, MS The Junction
6351 I-55 North 3		 39213 SC  Fee  1996  2003   100%   107,780  $1,153,778  $11.01   97.2%  PetSmart (2012), Office Depot (2016), Target (Not Owned),
Home Depot (Not Owned)
 
311
  Oxford, MS Oxford Place
2015-2035 University Avenue		 38655 SC  Fee(3) 2000  2003   20%   13,200  $325,604  $14.47   98.3%  Kroger (2020)
 
312
  Starkville, MS Starkville Crossings
882 Highway 12 West		 39759 SC  Fee  1999/2004  1994   100%   133,691  $927,006  $6.93   100%  JCPenney (2010), Kroger (2042), Lowe’s (Not Owned)
 
313
  Tupelo, MS Big Oaks Crossing
3850 North Gloster Street		 38801 SC  Fee  1992  1994   100%   348,236  $2,048,219  $5.93   99.1%  Sam’s Club (2012), Goody’s (2012), Wal-Mart (2012)
    Missouri                                      
 
314
  Arnold, MO Jefferson County Plaza
Vogel Road		 63010 SC  Fee(3) 2002  1*  50%   42,091  $542,534  $15.04   85.7%  Home Depot (Not Owned), Target (Not Owned)
 
315
  Brentwood,MO The Promenade at Brentwood1
Brentwood Promenade Court		 63144 SC  Fee  1998  1998   100%   299,584  $4,148,608  $13.85   100%  Target (2023), Bed Bath & Beyond (2014), PetSmart (2014), Lane Home Furnishings (2013)
 
316
  Des Peres, MO Olympic Oaks Village
12109 Manchester Road		 63121 SC  Fee  1985  1998   100%   92,372  $1,483,022  $16.69   96.2%  T.J. Maxx (2011)
 
317
  Fenton, MO Fenton Plaza
Gravois & Highway 141		 63206 SC  Fee  1970/1997  1/2*  100%   93,420  $979,021  $11.31   91.4%   
 
318
  High Ridge, MO Gravois Village Plaza
4523 Gravois Village Plaza		 63049 SC  Fee  1983  1998   100%   114,992  $552,934  $5.46   88.1%  Kmart (2013)
 
319
  Independence, MO Independence Commons
900 East 39th Street		 64057 SC  Fee(3) 1995/1999  1995   14.5%   386,066  $5,037,447  $13.27   98.3%  Kohl’s (2016), Bed Bath & Beyond (2012), Marshalls (2012), Best Buy (2016), Barnes & Noble (2011), AMC Theatre (2015)


43

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
320
  Kansas City, MO Ward Parkway Center
8600 Ward Parkway		 64114 SC  Fee(3) 1959/2004  2003   20%   388,387  $5,702,959  $14.13   93.8%  Dick’s Clothing and Sporting Goods (2016), 24 Hour Fitness
(2023), PetSmart (2016), Staples (2018), Target (2023), AMC Theatre (2011), Off Broadway Shoes (2015), T.J. Maxx (2013), Dillard’s (2014)
 
321
  Springfield,MO Morris Corners
1425 East Battlefield		 65804 SC  GL  1989  1998   100%   56,033  $451,660  $9.82   82.1%  Toys “R” Us (2013)
 
322
  St. John, MO St. John Crossings
9000-9070 St. Charles Rock Road		 63114 SC  Fee  2003  2003   100%   88,450  $1,051,698  $11.69   95.5%  Shop ’n Save (2022)
 
323
  St. Louis, MO Plaza at Sunset Hills
10980 Sunset Plaza		 63128 SC  Fee  1997  1998   100%   415,435  $5,455,080  $12.71   93.8%  Toys “R” Us (2013), Bed Bath & Beyond (2012), Marshalls (2012), Home Depot (2023), PetSmart (2012), Borders (2011)
 
324
  St. Louis, MO Southtowne
Kings Highway & Chippewa		 63109 SC  Fee  2004  1998   100%   86,764  $1,346,438  $16.11   96.3%  Office Max(2014)
    Nevada                                      
 
325
  Carson City, NV Eagle Station
3871 South Carson Street		 89701 MV  Fee  1983  2005   50%   60,494  $0  $0.00   0%   
 
326
  Las Vegas, NV Loma Vista Shopping Center
4700 Meadows Lane		 89107 MV  Fee  1979  2005   50%   75,687  $795,906  $10.52   100%  Mervyns (2020)
 
327
  Las Vegas, NV Nellis Crossing Shopping
1300 South Nellis Boulevard		 89104 MV  Fee  1986  2005   50%   76,016  $711,009  $9.35   100%  Mervyns (2020)
 
328
  Reno, NV Sierra Town Center
6895 Sierra Center Parkway		 89511 MV  Fee  2002  2005   50%   79,239  $0  $0.00   0%   
 
329
  Reno, NV Reno Riverside
East First Street & Sierra		 89505 SC  Fee  2000  2000   100%   52,474  $698,335  $13.31   100%  Century Theatres (2014)
 
330
  S.W. Las Vegas, NV Grand Canyon Parkway
4265 South Grand Canyon Drive		 89147 MV  Fee  2003  2005   50%   79,294  $0  $0.00   0%   
    New Jersey                                      
 
331
  Brick, NJ Brick Center Plaza
51 Chambers Bridge Road		 08723 SC  Fee  1999  2007   100%   114,028  $1,809,059  $15.87   100%  Best Buy (2015), Bed Bath & Beyond 2010)
 
332
  East Hanover, NJ East Hanover Plaza
154 State Route 10		 07936 SC  Fee  1994  2007   100%   97,500  $1,764,383  $18.10   100%  Branch Brook Pool & Patio (2017), Sports Authority (2012)
 
333
  East Hanover, NJ Lowes Theatre Complex
145 State Route 10		 07936 SC  Fee  1993  2007   100%   20,737  $1,029,642  $22.72   89.7%  Lowe’s East Hanover Cinemas (2022)


44

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
334
  Edgewater, NJ Edgewater Town Center
905 River Road		 07020 LC  Fee  2000  2007   100%   77,508  $1,680,307  $22.33   97.1%  Whole Foods (2020)
 
335
  Freehold, NJ Freehold Marketplace
NJ Highway 33 & West Main Street
(Route 537)		 07728 SC  Fee  2005  1*  100%   234,454  $570,000   24.30   100%  Sam’s Club (Not Owned),
Wal-Mart (Not Owned)
 
336
  Hamilton, NJ Hamilton Marketplace
NJ State Highway 130 & Klockner Road		 08691 SC  Fee  2004  2003   100%   468,240  $8,590,135  $15.73   99.7%  Staples (2015), Kohl’s (2023), Linens ’N Things (2014),
Michaels(2014), Ross Dress For Less (2014), ShopRite
(2028), Barnes & Noble (2014), BJ’s Wholesale (Not Owned), Lowe’s (Not Owned), Wal-Mart (Not Owned)
 
337
  Lumberton, NJ Crossroads Plaza
1520 Route 38		 08036 SC  Fee(3) 2003  2007   20%   89,627  $1,597,144  $17.82   100%  ShopRite (2024), Lowe’s (Not Owned)
 
338
  Lyndhurst, NJ Lewandowski Commons
434 Lewandowski Street		 07071 SC  Fee(3) 1998  2007   20%   78,097  $1,687,116  $22.71   95.1%  Stop & Shop (2020)
 
339
  Mays Landing, NJ Hamilton Commons 4215 Black Horse
Pike		 08330 SC  Fee  2001  2004   100%   398,910  $6,139,343  $15.89   96.9%  Regal Cinemas (2021), Ross Dress For Less (2012), Bed Bath & Beyond (2017), Marshalls (2012), Sports Authority (2015),
Circuit City (2020)
 
340
  Mays Landing, NJ Wrangleboro Consumer Square
2300 Wrangleboro Road		 08330 SC  Fee  1997  2004   100%   843,019  $9,126,887  $12.09   89.5%  Borders (2017), Best Buy (2017), Kohl’s (2018), Staples
(2012), Babies “R” Us (2013), BJ’s Wholesale Club (2016),
Dick’s Clothing and Sporting Goods (2013), Michaels(2013), Target (2023), PetSmart (2013)


45

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
341
  Mount Laurel, NJ Centerton Square
Centerton Road & Marter Avenue		 08054 SC  Fee(3) 2005  1*  10%   280,067  $6,698,119  $18.68   100%  Wegman’s Food Markets (2024), Bed Bath & Beyond (2015), PetSmart (2015), DSW Shoe Warehouse (2015), Jo-Ann Stores (2015), T.J. Maxx (2015), Sports Authority (2016), Target(Not Owned), Costco (Not Owned)
 
342
  Princeton, NJ Nassau Park Pavilion
Route 1 & Quaker Bridge Road		 02071 SC  Fee  1995  1997   100%   289,375  $5,255,194  $20.08   90.5%  Borders (2011), Best Buy (2012), Linens ’N Things (2011), PetSmart (2011), Babies “R” Us (2016), Target (Not Owned), Sam’s Club (Not Owned), Home Depot (Not Owned), Wal-Mart (Not Owned)
 
343
  Princeton, NJ Nassau Park Pavilion
Route 1 & Quaker Bridge Road		 02071 SC  Fee  1999/2004  1*  100%   202,622  $3,997,878  $15.70   98.7%  Dick’s Clothing and Sporting Goods (2015), Michaels(2009), Wegman’s Food Markets (2024), Kohl’s (2019), Target (Not Owned)
 
344
  Union, NJ Route 22 Retail Center
2700 U.S. Highway 22 East		 07083 SC  Fee  1997  2007   100%   103,453  $1,508,206  $18.54   78.6%  Circuit City (2018), Babies “R” Us (2018), Target (Not Owned)
 
345
  West Long Branch, NJ Monmouth Consumer Square
310 State Highway #36		 07764 SC  Fee  1993  2004   100%   292,999  $4,101,372  $14.12   99.1%  Sports Authority (2012), Barnes & Noble (2010), PetSmart (2014), Home Depot (2013)
 
346
  West Paterson, NJ West Falls Plaza
1730 Route 46		 07424 SC  Fee(3) 1995  2007   20%   81,261  $1,917,571  $21.75   100%  A & P Company (2021)
    New Mexico                                      
 
347
  Los Alamos, NM Mari Mac Village
800 Trinity Drive		 87533 SC  Fee  1978/1997  1/2*  100%   93,021  $681,141  $7.32   100%  Smith’s Food & Drug (2012)
    New York                                      
 
348
  Amherst, NY 7370 Transit Road 14031 SC  Fee(3) 1992  2004   14.5%   16,030  $0  $0.00   0%   


46

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
349
  Amherst, NY Boulevard Consumer Square
1641-1703 Niagara Falls Boulevard		 14228 SC  Fee  1998/2001/
2003		  2004   100%   547,403  $7,652,324  $13.27   96%  Target (2019), Babies “R” Us (2015), Barnes & Noble (2014), Best Buy (2016), Bed Bath & Beyond (2018), A.C. Moore (2013), Lowe’s (2030)
 
350
  Amherst, NY Burlington Plaza
1551 Niagara Falls Boulevard		 14228 SC  GL  1978/1982/
1990/1998		  2004   100%   199,504  $2,096,108  $10.73   98%  Burlington Coat Factory (2014), Jo-Ann Stores (2014)
 
351
  Amherst, NY Sheridan Harlem Plaza
4990 Harlem Road		 14226 SC  Fee  1960/1973/
1982/1988		  2004   100%   58,413  $593,043  $12.22   83.1%   
 
352
  Amherst, NY Tops Plaza - Amherst
3035 Niagara Falls Boulevard		 14226 SC  Fee(3) 1986  2004   20%   145,192  $1,153,249  $8.38   94.8%  Tops Markets (2010)
 
353
  Amherst, NY Tops Plaza - Transit/North French
9660 Transit Road		 14226 SC  Fee  1998  2004   100%   114,177  $1,151,118  $10.35   97.4%  Tops Markets (2016)
 
354
  Amherst, NY Rite Aid
2545 Millersport Highway		 14068 SC  Fee  2000  2007   100%   10,908  $250,489  $22.96   100%   
 
355
  Arcade, NY Tops Plaza-Arcade
Route 39		 14009 SC  Fee  1995  2004   10%   65,915  $668,504  $10.14   100%  Tops Markets (2015)
 
356
  Avon, NY Tops Plaza-Avon
270 East Main Street		 14414 SC  Fee(3) 1997/2002  2004   10%   63,288  $479,857  $8.26   91.8%  Tops Markets (2017)
 
357
  Batavia, NY BJ’s Plaza
8326 Lewiston Road		 14020 SC  Fee(3) 1996  2004   14.5%   95,846  $847,004  $8.84   100%  BJ’s Wholesale Club (2016)
 
358
  Batavia, NY Batavia Commons
419 West Main Street		 14020 SC  Fee(3) 1990  2004   14.5%   49,431  $410,389  $9.36   88.7%   
 
359
  Batavia, NY Martin’s Plaza
8351 Lewiston Road		 14020 SC  Fee(3) 1994  2004   14.5%   37,140  $496,328  $14.04   95.2%  Martin’s (Not Owned)
 
360
  Big Flats, NY Big Flats Consumer Square 830 County
Route 64		 14814 SC  Fee  1993/2001  2004   100%   641,264  $5,268,023  $9.35   87.9%  Wal-Mart (2013), Sam’s Club (2013), Tops Markets (2013),
Bed Bath & Beyond (2014), Michaels (2010), Old Navy (2009), Staples (2011), Barnes & Noble (2011), T.J. Maxx (2013)
 
361
  Buffalo, NY Elmwood Regal Center
1951 - 2023 Elmwood Avenue		 14207 SC  Fee  1997  2004   100%   133,940  $1,674,783  $14.77   84.6%  Regal Cinemas (2017), Office Depot (2012)
 
362
  Buffalo, NY Marshalls Plaza
2150 Delaware Avenue		 14216 SC  Fee  1960/1975/
1983/1995		  2004   100%   82,196  $860,369  $11.46   91.4%  Marshalls (2009)


47

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
363
  Buffalo, NY Rite Aid
1625 Broadway Street		 14212 SC  Fee  2000  2007   100%   12,739  $280,861  $22.05   100%   
 
364
  Buffalo, NY Delaware Consumer Square
2636-2658 Delaware Avenue		 14216 SC  GL  1995  2004   100%   238,531  $2,074,503  $9.09   95.7%  A.J. Wright (2012), Office Max (2012), Target (2015)
 
365
  Cheektowaga, NY Borders Books
2015 Walden Avenue		 14225 SC  Fee(3) 1994  2004   14.5%   26,500  $609,500  $23.00   100%  Borders (2015)
 
366
  Cheektowaga, NY Union Road Plaza
3637 Union Road		 14225 SC  Fee(3) 1979/1982/
1997/2003		  2004   14.5%   174,438  $1,113,927  $6.93   92.2%  Dick’s Clothing and Sporting Goods (2015)
 
367
  Cheektowaga, NY Rite Aid
2401 Gennesee Street		 14225 SC  Fee  2000  2007   100%   10,908  $335,592  $30.77   100%   
 
368
  Cheektowaga, NY Thruway Plaza
2195 Harlem Road		 14225 SC  Fee  1965/1995/
1997/2004		  2004   100%   371,512  $2,762,120  $7.43   100%  Wal-Mart (2017), Movieland 8 Theatres (2019), Tops Markets (2019), A.J. Wright (2015), Value City Furniture (2014), M & T Bank (2017), Home Depot (Not Owned)
 
369
  Cheektowaga, NY Tops Plaza - Union Road
3825-3875 Union Road		 14225 SC  Fee(3) 1978/1989/
1995/2004		  2004   20%   151,357  $1,527,156  $12.07   83.6%  Tops Markets (2013)
 
370
  Cheektowaga, NY Union Consumer Square
3733 - 3735 Union Road		 14225 SC  Fee(3) 1989/1998/
2004		  2004   14.5%   386,548  $4,635,635  $12.21   98.2%  Marshalls (2009), Office Max (2010), Sam’s Club (2024),
Circuit City (2016), Jo-Ann Stores (2015), Bed Bath &
Beyond (2018)
 
371
  Cheektowaga, NY Walden Place
2130-2190 Walden Avenue		 14225 SC  Fee(3) 1994/1999  2004   14.5%   68,002  $653,083  $11.81   81.3%  Ollie’s Bargain Outlet (2012)
 
372
  Cheektowaga, NY Consumer Square
1700 - 1750 Walden Avenue		 14225 SC  Fee(3) 1997/1999/
2004		  2004   14.5%   255,964  $1,965,003  $8.97   85.5%  Office Depot (2009), Michaels(2013), Target (2015)
 
373
  Chili, NY Chili Plaza
800 Paul Road		 14606 SC  Fee  1998  2004   100%   116,868  $753,623  $6.06   100%  Sears (2019)
 
374
  Clarence, NY Eastgate Plaza
Transit & Greiner Roads		 14031 SC  GL(3) 1995/1997/
1999/2001		  2004   14.5%   520,876  $3,901,820  $8.24   91%  BJ’s Wholesale Club (2021), Dick’s Clothing and Sporting
Goods (2011), Michaels(2010), Wal-Mart (2019)
 
375
  Clarence, NY Jo-Ann Plaza
4101 Transit Road		 14221 SC  Fee(3) 1994  2004   14.5%   92,720  $743,588  $8.02   100%  Office Max (2009), Jo-Ann Stores (2015), Big Lots (2015), Home Depot (Not Owned)


48

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
376
  Dansville, NY Tops Plaza - Dansville
23-65 Franklin Street		 14437 SC  Fee  2001  2004   100%   71,640  $659,869  $9.99   92.2%  Tops Markets (2021)
 
377
  Dewitt, NY Dewitt Commons
3401 Erie Boulevard East		 13214 SC  Fee  2001/2003  2004   100%   306,177  $3,157,257  $10.39   99.3%  Toys “R” Us (2018), Old Navy (2011), Marshalls (2019), Bed Bath & Beyond (2018), A.C. Moore (2014), Syracuse Orthopedic Specialist (2017)
 
378
  Dewitt, NY Michaels - Dewitt
3133 Erie Boulevard		 13214 SC  Fee  2002  2004   100%   38,413  $480,166  $12.50   100%  Michaels (2010)
 
379
  Dunkirk, NY Rite Aid
1166 Central Avenue		 14048 SC  GL  2000  2007   100%   10,908  $210,569  $19.30   100%   
 
380
  Elimira, NY Tops Plaza - Elmira
Hudson Street		 14904 SC  Fee(3) 1997  2004   10%   98,330  $1,111,325  $11.30   100%  Tops Markets (2017)
 
381
  Gates, NY Westgate Plaza
2000 Chili Avenue		 14624 SC  Fee  1998  2004   100%   334,752  $3,252,271  $9.94   97.8%  Wal-Mart (2021), Staples (2015)
 
382
  Greece, NY Jo-Ann/PetSmart Plaza
3042 West Ridge Road		 14626 SC  Fee  1993/1999  2004   100%   75,916  $820,315  $10.81   100%  PetSmart (2010), Jo-Ann Stores (2015)
 
383
  Hamburg, NY BJ’s Plaza
4408 Milestrip Road		 14075 SC  GL  1990/1997  2004   100%   175,965  $1,771,563  $10.32   97.5%  Office Max (2010), BJ’s Wholesale Club (2010)
 
384
  Hamburg, NY McKinley Place
3701 McKinley Parkway		 14075 SC  Fee  2001  2004   100%   128,944  $1,543,651  $12.18   98.3%  Dick’s Clothing and Sporting Goods (2011), Rosa’s Home
Store (2009)
 
385
  Hamburg, NY Home Depot Plaza-Hamburg
4405 Milestrip Road		 14219 SC  GL  1999/2000  2004   100%   139,413  $1,353,228  $10.38   93.5%  Home Depot (2012)
 
386
  Hamburg, NY McKinley Milestrip Center
3540 McKinley Parkway		 14075 SC  Fee  1999  2004   100%   106,774  $1,350,521  $13.52   93.6%  Old Navy (2010), Jo-Ann Stores (2015)
 
387
  Hamburg, NY South Park Plaza - Tops
6150 South Park Avenue		 14075 SC  Fee(3) 1990/1992  2004   10%   84,000  $730,500  $8.70   100%  Tops Markets (2015)
 
388
  Hamlin, NY Tops Plaza - Hamlin 1800 Lake Road 14464 SC  Fee(3) 1997  2004   10%   60,488  $431,055  $8.37   85.2%  Tops Markets (2017)
 
389
  Horseheads, NY Southern Tier Crossing
Ann Page Road & Interstate 86		 14845 SC  Fee  2008  1*  100%   118,958  $1,658,198  $13.94   100%  Circuit City (2018), Dick’s Clothing and Sporting Goods
(2019), Wal-Mart (Not Owned), Kohl’s (Not Owned)
 
390
  Irondequoit, NY Culver Ridge Plaza
2255 Ridge Road East		 14622 SC  Fee(3) 1972/1984/
1997		  2004   20%   226,768  $2,229,599  $11.45   85.9%  Regal Cinema (2022), A.J. Wright (2014)


49

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
391
  Ithaca, NY Tops Plaza - Ithaca
614 - 722 South Meadow		 14850 SC  Fee  1990/1999/
2003		  2004   100%   229,320  $3,745,409  $16.64   98.1%  Office Depot (2014), Tops Markets (2022), Michaels(2013), Barnes & Noble (2018)
 
392
  Jamestown, NY Tops Plaza - Jamestown
75 Washington Street		 14702 SC  Fee(3) 1997  2004   20%   98,001  $926,450  $11.75   80.5%  Tops Markets (2018)
 
393
  Lancaster, NY Transit Wehrle Retail Center
6703-6733 Transit Road		 14221 SC  Fee(3) 1997  2004   14.5%   105,249  $1,029,761  $8.77   99.7%  Regal Cinemas (2017)
 
394
  Leroy, NY Tops Plaza -Leroy
128 West Main Street		 14482 SC  Fee(3) 1997  2004   20%   62,747  $556,364  $9.47   93.6%  Tops Markets (2017)
 
395
  Lockport, NY Wal-Mart/Tops Plaza - Lockport 5789 & 5839 Transit Road & Hamm 14094 SC  GL  1993  2004   100%   296,582  $2,742,291  $9.34   99%  Wal-Mart (2015), Tops Markets (2021), Sears (2011)
 
396
  N. Tonawanda, NY Mid-City Plaza
955-987 Payne Avenue		 14120 SC  Fee  1997/1960/
1976/1980		  2004   100%   224,949  $2,142,688  $11.82   80.6%  Tops Markets (2024)
 
397
  New Hartford, NY Consumer Square
4725 - 4829 Commercial Drive		 13413 SC  Fee(3) 2002  2004   14.5%   514,717  $6,348,225  $12.33   100%  Barnes & Noble (2013), Bed Bath & Beyond (2018), Best Buy (2013), Staples (2018), Michaels(2013), Wal-Mart (2022), T.J. Maxx (2012)
 
398
  New Hartford, NY Hannaford Plaza
40 Kellogg Road		 13413 SC  Fee  1998  2004   100%   127,777  $1,185,530  $12.70   73.1%  Hannaford Brothers(2018)
 
399
  Niagara Falls, NY Regal Cinemas - Niagara Falls 720 & 750 Builders Way 14304 SC  Fee  1994/2000  2004   100%   43,170  $577,615  $13.38   100%  Regal Cinemas (2019)
 
400
  Niskayuna, NY Mohawk Commons
402 - 442 Balltown Road		 12121 SC  Fee  2002  2004   100%   399,901  $4,709,348  $11.57   100%  Price Chopper (2022), Lowe’s (2022), Marshalls (2012),
Barnes & Noble (2014), Bed Bath & Beyond (2019), Target
(Not Owned)
 
401
  Norwich, NY P & C Plaza
54 East Main Street		 13815 SC  GL(3) 1997  2004   10%   85,453  $1,133,385  $13.45   98.6%  Tops Markets (2018)
 
402
  Olean, NY Wal-Mart Plaza - Olean
3142 West State Street		 14760 SC  Fee  1993/2004  2004   100%   363,509  $2,364,278  $6.69   97.2%  Wal-Mart (2023), Eastwynn Theatres (2014), BJ’s Wholesale Club (2014), Home Depot (Not Owned)
 
403
  Ontario, NY Tops Plaza - Ontario
6254-6272 Furnace Road		 14519 SC  Fee(3) 1998  2004   20%   77,040  $698,613  $10.12   89.6%  Tops Markets (2019)
 
404
  Orchard Park, NY Crossroads Centre
3245 Southwestern Boulevard		 14127 SC  Fee(3) 2000  2004   20%   167,805  $1,878,226  $11.84   94.6%  Tops Markets (2022), Stein Mart (2012)


50

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
405
  Plattsburgh, NY Plattsburgh Consumer Square Route 3 - Cornelia Road 12901 SC  Fee  1993/2004  2004   100%   491,513  $3,374,096  $7.31   93.9%  Sam’s Club (2013), Wal-Mart (2020), T.J. Maxx (2013), PetSmart (2014), Michaels (2011)
 
406
  Rochester, NY Panorama Plaza
1601 Penfield Road		 14625 SC  Fee(3) 1959/1965/
1972/1980		  2004   20%   279,219  $3,173,430  $13.31   85.4%  Tops Markets (2014), Staples (2018)
 
407
  Rome, NY Freedom Plaza
205-211 Erie Boulevard West		 13440 SC  Fee  1978/2000/
2001		  2004   100%   194,467  $1,228,712  $6.05   100%  Staples (2015), JCPenney (2017), Tops Markets (2021),
Marshalls (2016)
 
408
  Tonawanda, NY Youngmann Plaza
750 Young Street		 14150 SC  Fee(3) 1985/2003  2004   10%   306,421  $2,354,329  $7.51   96.9%  BJ’s Wholesale Club (2010), Big Lots (2012), Gander
Mountain (2015), Tops Markets (2021)
 
409
  Tonawanda, NY Office Depot Plaza
2309 Eggert Road		 14150 SC  Fee  1976/1985/
1996		  2004   100%   121,846  $1,013,514  $10.48   79.3%  Best Fitness (2025), Office Depot (2011)
 
410
  Tonawanda, NY Sheridan/Delaware Plaza
1692-1752 Sheridan Drive		 14223 SC  Fee  1950/1965/
1975/1986		  2004   100%   188,200  $1,362,021  $7.24   100%  Bon Ton Home Store (2010), Tops Markets (2020)
 
411
  Tonawanda, NY Tops Plaza - Niagara Street
150 Niagara Street		 14150 SC  Fee(3) 1997  2004   10%   97,014  $1,058,970  $12.05   90.6%  Tops Markets (2017)
 
412
  Victor, NY Victor Square
2-10 Commerce Drive		 14564 SC  Fee  2000  2004   100%   56,134  $617,176  $17.91   61.4%   
 
413
  Warsaw, NY Tops Plaza - Warsaw
2382 Route 19		 14569 SC  Fee(3) 1998  2004   20%   74,105  $547,564  $8.74   84.5%  Tops Markets (2015)
 
414
  West Seneca, NY Home Depot Plaza
1881 Ridge Road		 14224 SC  GL  1975/1983/
1987/1995		  2004   100%   139,453  $1,393,933  $10.30   97%  Home Depot (2016)
 
415
  West Seneca, NY Seneca Ridge Plaza 3531 Seneca Street 14224 SC  Fee  1980/1996/
2004		  2004   100%   62,403  $255,692  $6.88   59.6%  Office Depot (2018)
 
416
  Williamsville, NY Williamsville Place
5395 Sheridan Drive		 14221 SC  Fee  1986/1995/
2003		  2004   100%   102,917  $1,179,435  $14.31   80.1%   
 
417
  Williamsville, NY Premier Place
7864 - 8020 Transit Road		 14221 SC  Fee(3) 1986/1994/
1998		  2004   14.5%   141,639  $1,214,298  $10.78   79.5%  Premier Liquors (2010), Stein Mart (2013)
    North Carolina                                      
 
418
  Apex, NC Beaver Creek Crossings South 1335 West Williams Street 27502 SC  Fee  2006  1*  100%   283,266  $4,607,160  $15.60   99.1%  Dick’s Clothing and Sporting Goods (2017), Consolidated
Theatres (2026), T.J. Maxx (2016), Circuit City (2022),
Borders (2022)


51

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
419
  Apex, NC Beaver Creek Commons
1335 West Williams Street		 27502 SC  Fee(3) 2005  1*  10%   110,429  $2,159,927  $18.68   77%  Office Max (2014), Lowe’s (Not Owned), Target (Not Owned)
 
420
  Asheville, NC Oakley Plaza
Fairview Road at Interstate 240		 28801 SC  Fee(3) 1988  2007   100%   118,699  $934,539  $8.48   92.9%  Babies “R” Us (2011), BI-LO (2016)
 
421
  Asheville, NC River Hills
299 Swannanoa River Road		 28805 SC  Fee(3) 1996  2003   14.5%   190,970  $1,886,432  $11.37   86.9%  Carmike Cinemas (2017), Circuit City (2017), Dick’s
Clothing and Sporting Goods (2017), Michaels (2013), Office Max (2011)
 
422
  Cary, NC Circuit City - Cary
1401 Piney Plains Road		 27511 SC  Fee  2000  2007   100%   27,891  $526,500  $18.88   100%  Circuit City (2022)
 
423
  Cary, NC Mill Pond Village
3434-3490 Kildaire Farm Road		 27512 SC  Fee  2004  2007   100%   84,364  $1,219,090  $14.97   92.1%  Lowe’s Foods (2021)
 
424
  Chapel Hill, NC Meadowmont Village
West Barbee Chapel Road		 27517 SC  Fee(3) 2002  2007   20%   132,745  $2,456,909  $20.91   88.5%  Harris Teeter Supermarkets (2022)
 
425
  Charlotte, NC Camfield Corners
8620 Camfield Street		 28277 SC  Fee  1994  2007   100%   69,910  $869,351  $12.88   96.6%  BI-LO (2014)
 
426
  Clayton, NC Clayton Corners
U.S. Highway 70 West		 27520 SC  Fee(3) 1999  2007   20%   125,653  $1,387,987  $11.51   96%  Lowe’s Foods (2019)
 
427
  Concord, NC Rite Aid - Concord
Highway #29 at Pitts School		 28027 SC  Fee  2002  2007   100%   10,908  $227,814  $20.89   100%   
 
428
  Cornelius, NC The Shops at the Fresh Market
20601 Torrence Chapel Road		 28031 SC  Fee  2001  2007   100%   131,242  $1,044,213  $9.72   81.8%  Stein Mart (2013)
 
429
  Durham, NC Patterson Place
3616 Witherspoon Boulevard		 27707 SC  Fee(3) 2004  2007   20%   161,017  $2,091,493  $14.33   90.6%  DSW Shoe Warehouse (2016), A.C. Moore (2014), Bed Bath & Beyond (2020)
 
430
  Durham, NC Oxford Commons
3500 Oxford Road		 27702 SC  Fee  1990/2001  1/2*  100%   208,014  $1,366,288  $6.98   94.1%  Food Lion (2010), Burlington Coat Factory (2012), Wal-Mart (Not Owned)
 
431
  Durham, NC South Square
4001 Durham Chapel		 27707 SC  Fee(3) 2005  2007   20%   107,812  $1,612,970  $14.92   97.2%  Office Depot (2010), Ross Dress For Less (2015), Target
(Not Owned)
 
432
  Fayetteville, NC Cross Pointe Center
5075 Morganton Road		 28314 SC  Fee  1985/2003  2003   100%   226,089  $1,913,392  $8.46   100%  T.J. Maxx(2011), Bed Bath & Beyond(2014)


52

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
433
  Fayetteville, NC Fayetteville Pavilion
2061 Skibo Road		 28314 SC  Fee(3) 1998/2001  2007   20%   272,385  $2,713,492  $11.43   87.2%  Dick’s Clothing and Sporting Goods (2017), PetSmart (2016), Creative Basket Expressions (2020), Marshalls (2014), Michaels (2014)
 
434
  Fuquay Varina, NC Sexton Commons
1420 North Main Street		 27526 SC  Fee(3) 2002  2007   20%   49,097  $777,531  $15.84   100%  Harris Teeter Supermarkets (2021)
 
435
  Greensboro, NC Adams Farm
5710 High Point Road		 27407 SC  Fee  2004  2007   100%   112,010  $906,328  $10.54   76.8%  Harris Teeter Supermarkets (2013)
 
436
  Greensboro, NC Golden Gate
East Cornwallis Drive		 27405 SC  Fee  1962/2002  2007   100%   153,113  $1,137,872  $8.52   87.2%  Harris Teeter Supermarkets (2011), Staples (2016), Food
Lion (2012)
 
437
  Greensboro, NC Shopes at Wendover Village I 4203-4205 West Wendover Avenue 27407 SC  Fee  2004  2007   100%   35,895  $947,003  $26.38   100%  Costco (Not Owned)
 
438
  Greensboro, NC Wendover II
West Wendover Avenue		 27407 SC  Fee(3) 2004  2007   20%   135,004  $1,745,841  $16.51   78.3%  A.C. Moore (2014), Circuit City (2020)
 
439
  Huntersville, NC DDRTC Birkdale Village LLC 8712 Lindholm Drive, Suite 206 28078 LC  Fee(3) 2003  2007   15%   301,045  $6,577,959  $24.96   87.1%  Barnes & Noble (2013), Dick’s Clothing and Sporting Goods (2018)
 
440
  Huntersville, NC Rosedale Shopping Center
9911 Rose Commons Drive		 28078 SC  Fee(3) 2000  2007   20%   119,197  $1,960,458  $16.45   100%  Harris Teeter Supermarkets (2020)
 
441
  Indian Trail, NC Union Town CenterIndependence &
Faith Church Road		 28079 SC  Fee  1999  2004   100%   96,160  $710,064  $9.40   78.5%  Food Lion (2020)
 
442
  Jacksonville, NC Gateway Plaza - Jacksonville
SEC Western Boulevard & Gateway South		 28546 SC  Fee(3) 2001  2007   15%   101,413  $1,154,275  $11.38   100%  Bed Bath & Beyond (2013), Ross Dress For Less (2013),
Lowe’s (Not Owned), Target (Not Owned)
 
443
  Matthews, NC Sycamore Commons
Matthews Townshop Parkway &
Northeast Parkway		 28105 SC  Fee(3) 2002  2007   15%   265,535  $4,571,779  $17.55   98.1%  Michaels (2012), Bed Bath & Beyond (2012), Dick’s Clothing and Sporting Goods (2017), Old Navy (2011), Circuit City (2023), Costco (Not Owned), Lowe’s (Not Owned)
 
444
  Mooresville, NC Mooresville Consumer Square I
355 West Plaza Drive		 28117 SC  Fee  1999  2004   100%   472,182  $4,109,097  $9.65   90.1%  Wal-Mart (2019), Gander Mountain (2021)


53

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
445
  Mooresville, NC Winslow Bay Commons
Bluefield Road and Highway 150		 28117 SC  Fee(3) 2003  2007   15%   255,798  $3,152,594  $13.39   86.8%  Ross Dress For Less (2014), Dick’s Clothing and Sporting
Goods (2019), T.J. Maxx (2013), Michaels(2013), Super
Target (Not Owned)
 
446
  New Bern, NC Rivertowne Square
3003 Claredon Boulevard		 28561 SC  Fee  1989/1999  1/2*  100%   68,130  $636,063  $9.55   97.8%  Goody’s (2012), Wal-Mart (Not Owned)
 
447
  Raleigh, NC Alexander Place
Glenwood Avenue & Brier Creek
Parkway		 27617 SC  Fee(3) 2004  2007   15%   188,254  $2,562,094  $14.21   95.8%  Kohl’s (2025), H.H. Gregg Appliances (2022), Super Wal-Mart (Not Owned)
 
448
  Raleigh, NC Capital Crossing
2900-2950 East Mill Brook Road		 27613 SC  Fee  1995  2007   100%   83,248  $888,670  $10.68   99.9%  Lowe’s Foods (2015), Staples (2011)
 
449
  Raleigh, NC Rite Aid
U.S. Highway 401 & Perry Creek Road		 27616 SC  Fee  2003  2007   100%   10,908  $284,571  $26.09   100%   
 
450
  Raleigh, NC Wakefield Crossing
Wakefield Pines Drive & New Falls of Neuse		 27614 SC  Fee  2001  2007   100%   75,927  $889,181  $13.08   89.6%  Food Lion (2022)
 
451
  Salisbury, NC Alexander Pointe
850 Jake Alexander Boulevard		 28144 SC  Fee(3) 1997  2007   20%   57,710  $640,344  $11.37   97.6%  Harris Teeter Supermarkets (2017)
 
452
  Siler City, NC Chatham Crossing
U.S. Highway 64 West		 27344 SC  Fee(3) 2002  2007   15%   31,979  $400,460  $13.36   93.7%  Super Wal-Mart (Not Owned)
 
453
  Southern Pines, NC Southern Pines Marketplace
U.S. Highway 15-501		 28387 SC  Fee(3) 2002  2007   15%   57,404  $440,216  $10.21   75.1%  Stein Mart (2016)
 
454
  Wake Forest, NC Capital Plaza
11825 Retail Drive		 27587 SC  Fee(3) 2004  2007   15%   46,793  $587,448  $13.60   92.3%  Super Target (Not Owned), Home Depot (Not Owned)
 
455
  Washington, NC Pamlico Plaza
536 Pamlico Plaza		 27889 SC  Fee  1990/1999  1/2*  100%   80,269  $559,503  $7.08   98.5%  Goody’s (2009), Office Depot (2014), Wal-Mart (Not Owned)
 
456
  Wilmington, NC University Centre
South College Road & New Centre Drive		 28403 SC  Fee  1989/2001  1/2*  100%   411,887  $3,625,630  $9.46   93%  Lowe’s (2014), Old Navy (2011), Bed Bath & Beyond (2012), Ross Dress For Less (2012), Steve & Barry’s (2014), Badcock Home Furniture & More (2009), Sam’s Club (Not Owned)
 
457
  Wilmington, NC Oleander Shopping Center
3804 Oleander Drive		 28401 SC  GL  1989  2007   100%   51,888  $578,191  $11.14   100%  Lowe’s Foods (2015)


54

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
458
  Wilson, NC Forest Hills Centre
1700 Raleigh Road N.W.		 27896 SC  Fee  1989  2007   100%   73,280  $586,231  $9.36   85.4%  Harris Teeter Supermarkets (2010)
 
459
  Winston Salem, NC Harper Hill Commons
5049 Country Club Road		 27104 SC  Fee(3) 2004  2007   20%   55,394  $1,122,896  $19.97   81.5%  Harris Teeter Supermarkets (2024)
 
460
  Winston Salem, NC Oak Summit
East Hanes Mill Road		 27105 SC  Fee(3) 2003  2007   15%   142,394  $1,788,169  $12.56   100%  Goody’s (2016), Staples (2016), PetSmart (2020), Super Wal-Mart (Not Owned)
 
461
  Winston Salem, NC Shops at Oliver Crossing
Peters Creek Parkway Oliver Crossing		 27127 SC  Fee(3) 2003  2007   20%   76,512  $856,512  $12.54   89.3%  Lowe’s Foods (2023)
 
462
  Winston Salem, NC Wal-Mart Supercenter
4550 Kester Mill Road		 27103 SC  Fee  1998  2007   100%   204,931  $1,403,777  $6.85   100%  Wal-Mart (2017)
    North Dakota                                      
 
463
  Dickinson, ND Prairie Hills Mall
1681 Third Avenue		 58601 MM  Fee  1978  1/2*  100%   267,506  $1,054,601  $4.58   86.1%  Kmart (2013), Herberger’s (2010), JCPenney (2013)
    Ohio                                      
 
464
  Alliance, OH Wal-Mart Supercenter
2700 West State Street		 44601 SC  Fee  1998  2007   100%   200,084  $1,190,500  $5.95   100%  Wal-Mart (2017)
 
465
  Ashtabula, OH Ashtabula Commons
1144 West Prospect Road		 44004 SC  Fee  2000  2004   100%   57,874  $895,720  $15.48   100%  Tops Markets (2021)
 
466
  Aurora, OH Barrington Town Center
70-130 Barrington Town Square		 44202 SC  Fee  1996/2004  1*  100%   102,683  $968,002  $9.90   91.8%  Cinemark (2011), Heinen’s (Not Owned)
 
467
  Boardman, OH Southland Crossings
I-680 & U.S. Route 224		 44514 SC  Fee  1997  1*  100%   506,254  $4,233,095  $8.34   98.9%  Lowe’s (2016), Babies “R” Us (2014), Staples (2012),
Dick’s Clothing and Sporting Goods (2012), Wal-Mart (2017), PetSmart (2013), Giant Eagle (2018)
 
468
  Canton, OH Belden Park Crossings
5496 Dressler Road		 44720 SC  Fee(3) 1995/2001/
2003		  1*  14.5%   478,106  $5,243,937  $11.14   98.5%  Value City Furniture (2011), H.H. Gregg Appliances (2011), Jo-Ann Stores (2013), PetSmart (2013), Dick’s Clothing and Sporting Goods (2010), DSW Shoe Warehouse (2012), Kohl’s (2016), Target (Not Owned)
 
469
  Chillicothe, OH Chillicothe Place
867 North Bridge Street		 45601 SC  GL(3) 1974/1998  1/2*  20%   106,262  $1,046,216  $9.85   100%  Kroger (2041), Office Max (2013)


55

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
470
  Chillicothe, OH Chillicothe Place (Lowe’s)
867 North Bridge Street		 45601 SC  Fee  1998  1981   100%   130,497  $822,132  $6.30   100%  Lowe’s (2015)
 
471
  Cincinnati, OH Glenway Crossing
5100 Glencrossing Way		 45238 SC  Fee  1990  1993   100%   235,433  $1,637,759  $8.80   79.1%  Steve & Barry’s (2014), Michaels(2011)
 
472
  Cincinnati, OH Kroger - Cincinnati
6401 Colerain Avenue		 45239 SC  Fee  1998  2007   100%   56,634  $556,486  $9.83   100%  Kroger (2015)
 
473
  Cincinnati, OH Tri-County Mall
11700 Princeton Pike		 45246 SC  Fee(3) 1960/1990/
1992		  2005   18%   758,031  $11,868,101  $19.00   87.1%  Dillard’s (2018), Sears (2019), Krazy City (2023), Macy’s
(Not Owned)
 
474
  Cleveland, OH Kmart Plaza
14901-14651 Lorain Avenue		 44111-3196 SC  Fee(3) 1982  2008   25.25%   109,350  $737,545  $7.30   92.4%  Kmart (2012)
 
475
  Columbus, OH Consumer Square West
3630 Soldano Boulevard		 43228 SC  Fee  1989/2003  2004   100%   356,515  $2,102,676  $7.13   82.7%  Kroger (2014), Target (2011)
 
476
  Columbus, OH Easton Market
3740 Easton Market		 43230 SC  Fee  1998  1998   100%   509,611  $5,874,783  $12.53   92%  Staples (2013), PetSmart (2014), Golfsmith Golf Center
(2013), Michaels(2013), Dick’s Clothing and Sporting Goods (2013), DSW Shoe Warehouse (2012), Kittle’s Home Furnishings (2012), Bed Bath & Beyond (2014), T.J. Maxx (2014)
 
477
  Columbus, OH Lennox Town Center
1647 Olentangy River Road		 43212 SC  Fee(3) 1997  1998   50%   352,913  $3,586,126  $10.16   100%  Target (2016), Barnes & Noble (2012), Staples (2011), AMC Theatre (2021)
 
478
  Columbus, OH Sun Center
3622-3860 Dublin Granville Road		 43017 SC  Fee(3) 1995  1998   79.45%   305,428  $3,654,396  $12.03   99.5%  Babies “R” Us (2011), Michaels(2013), Ashley Furniture Homestore (2012), Stein Mart (2012), Whole Foods (2016), Staples (2010)
 
479
  Columbus, OH Hilliard Rome Commons
1710-60 Hilliard Rome Road		 43026 SC  Fee(3) 2001  2007   20%   110,871  $1,454,153  $13.59   96.5%  Giant Eagle (2022)
 
480
  Dublin, OH Dublin Village Center
6561-6815 Dublin Center Drive		 43017 SC  Fee  1987  1998   100%   213,162  $516,729  $4.29   56.5%  AMC Theatre (2009), B.J.’s Wholesale Club (Not Owned)
 
481
  Dublin, OH Perimeter Center
6644-6804 Perimeter Loop Road		 43017 SC  Fee  1996  1998   100%   137,556  $1,605,599  $11.78   99.1%  Giant Eagle (2014)
 
482
  Elyria, OH Elyria Shopping Center
841 Cleveland		 44035 SC  Fee  1977  2*  100%   92,125  $601,720  $6.53   100%  Giant Eagle (2010)


56

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
483
  Gallipolis, OH Gallipolis Marketplace
2145 Eastern Avenue		 45631 SC  Fee  1998  2003   100%   25,950  $357,858  $13.79   100%  Wal-Mart (Not Owned)
 
484
  Grove City, OH Derby Square Shopping Center
2161-2263 Stringtown Road		 43123 SC  Fee(3) 1992  1998   20%   128,250  $1,156,351  $9.65   93.5%  Giant Eagle (2016)
 
485
  Huber Heights, OH North Heights Plaza
8280 Old Troy Pike		 45424 SC  Fee  1990  1993   100%   182,749  $1,696,124  $12.64   73.4%  H.H. Gregg Appliances (2023), Dick’s Clothing and Sporting Goods (2019), Wal-Mart (Not Owned)
 
486
  Lebanon, OH Countryside Place
1879 Deerfield Road		 45036 SC  Fee  1990/2002  1993   100%   17,000  $0  $0.00   0%  Erb Lumber (Not Owned), Wal-Mart (Not Owned)
 
487
  Macedonia, OH Macedonia Commons Macedonia Commons
Boulevard		 44056 SC  Fee(3) 1994  1994   50%   236,682  $3,179,832  $12.32   100%  Tops Markets (2019), Kohl’s (2016), Wal-Mart (Not Owned)
 
488
  Macedonia, OH Macedonia Commons (Phase II)8210
Macedonia Commons		 44056 SC  Fee  1999  1/2*  100%   169,481  $1,601,734  $9.45   100%  Cinemark (2019), Home Depot (2020)
 
489
  North Olmsted, OH Great Northern Plaza
2589-26437 Great Northern		 44070 SC  Fee(3) 1958/1998/
2003		  1997   14.5%   625,835  $7,475,794  $14.14   84.1%  DSW Shoe Warehouse (2015), Best Buy (2010), Bed Bath &
Beyond (2012), PetSmart (2018), Home Depot (2019), K & G Menswear (2013), Jo-Ann Stores (2009), Marc’s (2012), Remington College (Not Owned)
 
490
  Solon, OH Uptown Solon
Kruse Drive		 44139 SC  Fee  1998  1*  100%   183,255  $2,896,581  $15.98   98.9%  Mustard Seed Market & Café (2019), Bed Bath & Beyond
(2009), Borders (2019)
 
491
  Solon, OH Kmart Plaza
6221 Som Center		 44139-2912 SC  Fee(3) 1977  2008   25.25%   84,180  $299,819  $3.56   100%  Kmart (2013)
 
492
  Steubenville, OH Lowe’s Home Improvement
4115 Mall Drive		 43952 SC  Fee  1998  2007   100%   130,497  $871,236  $6.68   100%  Lowe’s (2016)
 
493
  Stow, OH Stow Community Shopping Center
Kent Road		 44224 SC  Fee  1997/2000  1*  100%   362,057  $3,677,589  $10.21   99.4%  Bed Bath & Beyond (2011), Giant Eagle (2017), Kohl’s
(2019), Office Max (2011), Hobby Lobby (2018), Target (Not Owned)
 
494
  Tiffin, OH Tiffin Mall
870 West Market Street		 44883 MM  Fee  1980/2004  1/2*  100%   170,868  $538,043  $4.84   65.1%  Cinemark (2011), JCPenney (2010)


57

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
495
  Toledo, OH Springfield Commons Shopping
South Holland-Sylvania Road		 43528 SC  Fee(3) 1999  1*  20%   241,129  $2,799,159  $11.11   99.3%  Kohl’s(2019), Gander Mountain (2014), Bed Bath & Beyond (2010), Old Navy (2010)
 
496
  Toledo, OH Dick’s Sporting Goods
851 West Alexis Road		 43612 SC  Fee  1995  2004   100%   80,160  $501,000  $6.25   100%  Dick’s Clothing and Sporting Goods (2016)
 
497
  West Chester, OH Kroger - West Chester
7172 Cincinnati-Dayton Road		 45069 SC  Fee  1998  2007   100%   56,634  $349,154  $6.17   100%  Kroger (2018)
 
498
  Westlake, OH West Bay Plaza
30100 Detroit Road		 44145 SC  Fee  1974/1997/
2000		  1/2*  100%   162,330  $1,372,560  $8.54   99%  Marc’s (2009), Kmart (2009)
 
499
  Willoughby Hills, OH Shoppes at Willoughby Hills
Chardon Road		 44092 SC  Fee(3) 1985  2007   15%   373,318  $3,122,852  $9.38   89.2%  Giant Eagle (2019), Cinemark (2010), A.J. Wright (2011),
Office Max (2009), Sam’s Club (2014)
 
500
  Xenia, OH West Park Square
1700 West Park Square		 45385 SC  Fee  1994/1997/
2001		  1*  100%   112,361  $613,860  $8.12   67.3%  Kroger (2019), Wal-Mart (Not Owned)
 
501
  Zanesville, OH Kmart Shopping Center
3515 North Maple Avenue		 43701-7001 SC  Fee(3) 1973  2008   25.25%   84,180  $223,160  $2.65   100%  Kmart (2009)
    Oklahoma                                      
 
502
  Enid, OK Kmart Plaza
4010 West Owen Garriot Road		 73703-4899 SC  Fee(3) 1983  2008   25.25%   84,000  $188,160  $2.24   100%  Kmart(2013), United Supermarkets(Not Owned)
 
503
  Oklahoma City, OK CVS Pharmacy
2323 North Martin Luther King Boulevard		 73102 SC  Fee  1997  2007   100%   9,504  $159,358  $16.77   100%   
    Oregon                                      
 
504
  Portland, OR Tanasbourne Town Center
N.W. Evergreen Parkway & N.W. Ring Road		 97006 SC  Fee(3) 1995/2001  1996   50%   309,617  $4,986,626  $18.73   86%  Ross Dress For Less (2013), Michaels(2014), Barnes & Noble (2011), Office Depot (2010), Haggan’s (2021), Nordstrom (Not Owned), Target (Not Owned), Mervyns (Not Owned)
    Pennsylvania                                      
 
505
  Allentown, PA B.J.’s Wholesale Club
1785 Airport Road South		 18109 SC  Fee  1991  2004   100%   112,230  $863,266  $7.69   100%  B.J.’s Wholesale Club (2011)
 
506
  Allentown, PA West Valley Marketplace
1091 Mill Creek Road		 18106 SC  Fee  2001/2004  2003   100%   259,239  $2,745,843  $10.59   100%  Wal-Mart (2021)
 
507
  Camp Hill, PA Camp Hill Center
3414 Simpson Ferry Road		 17011 SC  Fee  1978/2002  2007   100%   62,888  $288,000  $10.03   45.6%  Michaels (2013)


58

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
508
  Carlisle, PA Carlisle Commons Shopping Center
Ridge Street & Noble Boulevard		 17013 SC  Fee(3) 2001  2007   15%   393,033  $3,132,539  $8.75   91.1%  Wal-Mart (2022), T.J. Maxx (2012), Ross Dress For Less
(2014), Regal Cinemas (2010)
 
509
  Cheswick, PA Rite Aid
851 West Alexis Road		 15024 SC  Fee  2000  2007   100%   10,908  $248,609  $22.79   100%   
 
510
  Connelsville, PA Rite Aid
100 Memorial Boulevard		 15425 SC  Fee  1999  2007   100%   10,908  $312,181  $28.62   100%   
 
511
  E. Norriton, PA Kmart Plaza
2692 Dekalb Pike		 19401 SC  Fee  1975/1997  1/2*  100%   173,876  $1,223,372  $7.08   92.9%  Kmart (2010), Big Lots (2010)
 
512
  Erie, PA Peach Street Square
1902 Keystone Drive		 16509 SC  GL  1995/1998/
2003		  1*  100%   557,769  $4,997,713  $8.89   95.8%  Lowe’s (2015), PetSmart (2015), Circuit City (2020), Kohl’s (2016), Wal-Mart (2015), Cinemark (2011), Erie Sports (2018), Home Depot (Not Owned)
 
513
  Erie, PA Rite Aid
4145 Buffalo Road		 16510 SC  Fee  1999  2007   100%   10,908  $230,486  $21.13   100%   
 
514
  Erie, PA Rite Aid
404 East 26th Street		 16503 SC  Fee  1999  2007   100%   10,908  $260,047  $23.84   100%   
 
515
  Erie, PA Rite Aid
353 East 6th Street		 16507 SC  Fee  1999  2007   100%   10,908  $266,969  $24.47   100%   
 
516
  Erie, PA Erie Marketplace
6660-6750 Peach Street		 16509 SC  Fee(3) 2003  2003   14.5%   107,537  $1,076,117  $9.40   98.8%  Marshalls (2013), Bed Bath & Beyond (2013), Babies “R” Us (2014), Target (Not Owned)
 
517
  Erie, PA Rite Aid
5440 Peach Street		 16508 SC  Fee  2000  2007   100%   10,908  $336,691  $30.87   100%   
 
518
  Erie, PA Rite Aid
2923 West 26th Street		 16506 SC  Fee  1999  2007   100%   10,908  $332,311  $30.46   100%   
 
519
  Erie, PA Rite Aid
2184 West 12th Street		 16505 SC  GL  1999  2007   100%   10,908  $373,661  $34.26   100%   


59

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
520
  Homestead, PA Waterfront Market Amity
149 West Bridge Street		 15120 LC  Fee(3) 2003  2007   15%   764,824  $11,701,972  $15.61   98%  Loew’s Cinema (2020), Dick’s Clothing and Sporting Goods
(2012), Best Buy (2013), Michaels(2011), Filene’s Basement (2012), Office Depot (2017),T.J. Maxx (2011), Old Navy (2011), DSW Warehouse (2015), Marshalls (2010), Barnes And
Noble (2012), Dave And Busters (2020), Macy’s (Not Owned), Target (Not Owned)
 
521
  Irwin, PA Rite Aid
3550 Route 130		 15642 SC  Fee  1999  2007   100%   10,908  $262,741  $24.09   100%   
 
522
  King of Prussia, PA Overlook at King of Prussia
301 Goddard Boulevard		 19046 SC  Fee (3) 2002  2007   15%   105,615  $4,855,050  $25.82   100%  United Artists Theatre (2025), Nordstrom Rack (2012), Best
Buy (2017)
 
523
  Monaca, PA Township Marketplace
115 Wagner Road		 15061 SC  GL (3) 1999/2004  2003   14.5%   298,589  $3,059,159  $10.99   93.2%  Lowe’s (2017), Michaels (2018), Cinemark (2019)
 
524
  Monroeville, PA Rite Aid
4111 William Penn Highway		 15146 SC  Fee  1998  2007   100%   12,738  $484,028  $38.00   100%   
 
525
  Monroeville, PA Rite Aid
2604 Monroeville Boulevard		 15146 SC  Fee  1999  2007   100%   10,908  $295,339  $27.08   100%   
 
526
  Mount Nebo, PA Mount Nebo Pointe
Mount Nebo Road & Lowries Run Road		 15237 SC  Fee (3) 2005  1*  10%   99,447  $1,257,103  $14.38   81%  Sportsman’s Warehouse (2020), Sam’s Club (Not Owned), Target (Not Owned)
 
527
  New Castle, PA Rite Aid
31 North Jefferson Street		 16101 SC  Fee  1999  2007   100%   10,908  $261,740  $24.00   100%   
 
528
  Pittsburgh, PA Rite Aid
1804 Golden Mile Highway		 15239 SC  Fee  1999  2007   100%   10,908  $326,940  $29.97   100%   
 
529
  Pittsburgh, PA Rite Aid
2501 Saw Mill Run Boulevard		 15227 SC  Fee  1999  2007   100%   10,908  $342,233  $31.37   100%   
 
530
  Pottstown, PA Kmart Shopping Center
2200 East High Street		 19464 SC  Fee (3) 1973  2008   25.25%   84,180  $275,000  $3.27   100%  Kmart (2009)
 
531
  Willow Grove, PA Kmart Shopping Center
2620 Moreland Road		 19090 SC  Fee (3) 1973  2008   25.25%   94,500  $341,125  $3.61   100%  Kmart (2009)
    Puerto Rico                                      
 
532
  Arecibo, PR Plaza Del Atlantico
PR # Km 80.3		 00612 MM  Fee  1980/1993  2005   100%   215,451  $3,242,974  $15.47   90%  Kmart (2013), Capri del Atlantico (2013)


60

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
533
  Bayamon, PR Plaza Del Sol
Roadd PR#29 & PR#167, Hato Tejas		 00961 MM  Fee  1998/2003/
2004		  2005   100%   526,397  $17,012,196  $32.52   94.8%  Wal-Mart (2022), Science Park Cinema (2019), Bed Bath & Beyond (2017), Home Depot (Not Owned)
 
534
  Bayamon, PR Rexville Plaza
PR #167, Km 18.8		 00961 SC  Fee  1980/2002  2005   100%   126,023  $1,592,167  $11.52   96.6%  Pueblo Xtra (2009), Tiendas Capri (2013)
 
535
  Bayamon, PR Plaza Rio HondoPR#22, PR#167 00936 MM  Fee  1982/2001  2005   100%   481,499  $13,074,490  $25.73   97.3%  Tiendas Capri (2009), Best Buy (2021), Kmart (2013), Pueblo Xtra (2012), Rio Hondo Cinemas (2023), Marshalls (2015)
 
536
  Carolina, PR Plaza Escorial
Carretera #3, Km 6.1		 00987 SC  Fee  1997  2005   100%   420,462  $7,793,068  $14.65   99.8%  Office Max (2015), Wal-Mart (2024), Plaza Escorial Cinemas (2019), Sam’s Club (2024), Home Depot (Not Owned)
 
537
  Cayey, PR Plaza Cayey
State Road #1 & PR #735		 00736 SC  Fee  1999/2004  2005   100%   261,126  $3,073,186  $8.65   98%  Wal-Mart (2021), Plaza Cayey Centro Cinema (2018)
 
538
  Fajardo, PR Plaza Fajardo
Road PR #3 Int PR #940		 00738 SC  Fee  1992  2005   100%   245,319  $4,140,297  $16.58   100%  Wal-Mart (2012), Pueblo Xtra (2012)
 
539
  Guayama, PR Plaza Wal-Mart
Road PR #3 Km 135.0		 00784 SC  Fee  1994  2005   100%   163,598  $1,689,989  $10.69   96.6%  Wal-Mart (2018)
 
540
  Hatillo, PR Plaza Del Norte
Road#2 Km 81.9		 00659 MM  Fee  1992  2005   100%   510,979  $10,002,125  $25.35   78.9%  Sears (2014), Toys “R” Us (2018), JCPenney (2012), Wal-Mart (2012), Circuit City (2019)
 
541
  Humacao, PR Plaza Palma Real
State Road #3, Km 78.20		 00791 SC  Fee  1995  2005   100%   345,489  $6,679,674  $20.00   87.4%  Pep Boys (2015), JCPenney (2019), Capri Stores (2011),
Wal-Mart (2020), Office Max (2018)
 
542
  Isabela, PR Plaza Isabela
State Road #2 & # 454		 00662 SC  Fee  1994  2005   100%   238,410  $3,537,575  $14.09   97.3%  Coop (2014), Wal-Mart (2019)
 
543
  San German, PR Camino Real
State Road PR #122		 00683 SC  Fee  1991  2005   100%   22,356  $339,950  $5.14   100%  Pep Boys (2015)
 
544
  San German, PR Plaza Del Oeste
Road PR #2 Int PR #122		 00683 SC  Fee  1991  2005   100%   174,172  $2,360,667  $12.21   99.4%  Kmart (2016), Pueblo Xtra (2011)
 
545
  San Juan, PR Senorial Plaza
PR #53 & PR #177		 00926 MM  Fee  1978/
Mutiple		  2005   100%   168,664  $2,444,990  $16.09   84.3%  Kmart (2010), Pueblo Xtra (2015)
 
546
  Vega Baja, PR Plaza Vega Baja
Road PR #2 Int PR #155		 00693 SC  Fee  1990  2005   100%   180,488  $1,923,689  $10.61   96.9%  Kmart (2015), Pueblo Xtra (2010)
    Rhode Island                                      


61

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
547
  Middletown, RI Middletown Village
1315 West Main Street		 02842 SC  Fee  2003  2007   100%   98,161  $1,201,704  $17.13   71.5%  Barnes & Noble (2019), Michaels (2018)
 
548
  Warwick, RI Warwick Center
1324 Bald Hill Road		 02886 SC  Fee (3) 2004  2007   15%   159,958  $2,136,965  $17.50   76.4%  Dick’s Clothing and Sporting Goods (2018), Barnes & Noble (2018), DSW Shoe Warehouse (2014)
    South Carolina                                      
 
549
  Aiken, SC Aiken Exchange
Whiskey Road & Brook Haven Drive		 29803 SC  Fee (3) 2004  2007   15%   101,558  $334,898  $8.62   38.3%  PetSmart (2019), Target (Not Owned)
 
550
  Anderson, SC Anderson Central
651 Highway 28 Bypass		 29624 SC  Fee (3) 1999  2007   15%   223,211  $1,415,807  $6.54   96.9%  Wal-Mart (2019)
 
551
  Anderson, SC North Hill Commons
3521 Clemson Boulevard		 29621 SC  Fee (3) 2000  2007   15%   43,149  $431,962  $10.01   100%  Michaels (2013), Target (Not Owned)
 
552
  Camden, SC Springdale Plaza
1671 Springdale Drive		 29020 SC  Fee  1990/2000  1993   100%   180,127  $1,069,522  $7.54   78.7%  Belk (2015), Wal-Mart Super Center (Not Owned)
 
553
  Charleston, SC Ashley Crossing
2245 Ashley Crossing Drive		 29414 SC  Fee  1991  2003   100%   188,883  $736,846  $11.63   31.2%  Food Lion (2011)
 
554
  Columbia, SC Columbiana Station OEA
Harbison Boulevard & Bower Parkway		 29212 SC  Fee (3) 1999  2007   15%   379,733  $4,637,604  $16.21   75.3%  Circuit City (2020), Dick’s Clothing and Sporting Goods
(2016), Michaels (2010), PetSmart (2015), H.H. Gregg
Appliances (2015)
 
555
  Columbia, SC Target Super Center
10204 Two Notch Road		 29229 SC  Fee (3) 2002  2007   15%   83,400  $187,275  $6.71   33.5%  Michaels (2012), Target (Not Owned)
 
556
  Columbia, SC Harbison Court
Harbison Boulevard		 29212 SC  Fee (3) 1991  2002   14.5%   236,765  $2,914,126  $12.86   95.7%  Barnes & Noble (2011), Ross Dress For Less (2014),
Marshalls (2012), Office Depot (2011), Babies ‘R’ Us (Not Owned)
 
557
  Conway, SC Gateway Plaza - Conway
2701 Church Street		 29526 SC  Fee  2002  2007   100%   62,428  $598,782  $9.99   96%  Goody’s (2017)
 
558
  Easley, SC Center Pointe Plaza II
Calhoun Memorial Highway & Brushy Creek Road		 29642 SC  GL(3) 2004  2007   20%   72,287  $646,147  $11.06   80.8%  Publix Super Markets (2023), Home Depot (Not Owned)
 
559
  Fort Mill, SC Rite Aid
2907 West Highway 160		 29708 SC  Fee  2002  2007   100%   13,824  $309,853  $22.41   100%   
 
560
  Gaffney, SC Rite Aid
1320 West Floyd Baker Boulevard		 29341 SC  Fee  2003  2007   100%   13,818  $291,984  $21.13   100%   


62

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
561
  Greenville, SC Rite Aid3679 Augusta Road 29605 SC  Fee  2001  2007   100%   10,908  $283,423  $25.98   100%   
 
562
  Greenville, SC Wal-Mart Supercenter
1451 Woodruff Road		 29607 SC  Fee  1998  2007   100%   200,084  $1,272,534  $6.36   100%  Wal-Mart (2018)
 
563
  Greenville, SC The Point
1140 Woodruff Road		 29601 SC  Fee (3) 2005  2007   20%   104,641  $1,775,747  $16.97   100%  Whole Foods (2026), Circuit City (2021)
 
564
  Greenwood, SC BI-LO - Northside Plaza
U.S. Highway 25 & Northside Drive		 29649 SC  Fee  1999  2007   100%   41,581  $334,437  $8.04   100%  BI-LO (2019)
 
565
  Lexington, SC Lexington Place
U.S. Highway 378 & Old Cherokee Road		 29072 SC  Fee  2003  2007   100%   83,167  $864,796  $10.40   100%  Ross Dress For Less (2014), T.J. Maxx (2013), Publix (Not
Owned), Kohl’s (Not Owned)
 
566
  Mount Pleasant, SC Wando Crossing
1500 Highway 17 North		 29465 SC  Fee  1992/2000  1995   100%   209,810  $2,526,139  $12.60   95.5%  Circuit City (2018), Office Depot (2010), T.J. Maxx (2013), Marshalls (2011), Wal-Mart (Not Owned)
 
567
  Mount Pleasant, SC BI-LO at Shelmore
672 Highway 17 By-Pass		 29464 SC  Fee  2002  2007   100%   64,368  $920,894  $14.31   100%  BI-LO (2023)
 
568
  Myrtle Beach, SC Plaza at Carolina Forest
3735 Renee Drive		 29579 SC  Fee (3) 1999  2007   20%   116,657  $1,644,197  $13.39   95.7%  Kroger (2010)
 
569
  North Charleston, SC North Pointe Plaza
7400 Rivers Avenue		 29406 SC  Fee  1989/2001  2*  100%   294,471  $2,048,906  $7.02   99.2%  Wal-Mart (2009), Office Max (2014)
 
570
  North Charleston, SC North Charleston Center
5900 Rivers Avenue		 29406 SC  Fee  1980/1993  2004   100%   235,501  $1,243,210  $7.41   71.3%  Northern Tool (2016), Big Lots (2011), Home Decor
Liquidators (2012)
 
571
  Orangeburg, SC North Road Plaza
2795 North Road		 29115 SC  Fee  1994/1999  1995   100%   50,760  $568,393  $11.20   100%  Goody’s (2013), Wal-Mart (Not Owned)
 
572
  Piedmont, SC Rite Aid - Piedmont
915 Anderson Street		 29601 SC  Fee  2000  2007   100%   10,908  $181,052  $16.60   100%   
 
573
  Simpsonville, SC Fairview Station
621 Fairview Road		 29681 SC  Fee  1990  1994   100%   142,086  $885,125  $6.28   99.2%  Ingles (2011), Kohl’s (2015)
 
574
  Spartanburg, SC Rite Aid - Blackstock
1510 W.O. Ezell Boulevard		 29301 SC  Fee  2001  2007   100%   10,908  $271,599  $24.90   100%   
 
575
  Spartanburg, SC Northpoint Marketplace
8642-8760 Asheville Highway		 29316 SC  Fee  2001  2007   100%   102,252  $632,624  $7.23   82.6%  Ingles (2021)
 
576
  Spartanburg, SC Rite Aid - Spartanburg
780 North Pine Street		 29301 SC  Fee  2002  2007   100%   10,908  $283,656  $26.00   100%   
 
577
  Taylors, SC North Hampton Market
6019 Wade Hampton		 29687 SC  Fee (3) 2004  2007   20%   114,935  $1,100,896  $10.84   88.3%  Hobby Lobby (2019), Target (Not Owned)
 
578
  Taylors, SC Hampton Point
3033 Wade Hampton Boulevard		 29687 SC  Fee  1993  2007   100%   58,316  $458,027  $8.06   97.4%  BI-LO (2018)


63

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
579
  Woodruff, SC Rite Aid - Woodruff
121 North Main Street		 29388 SC  Fee  2002  2007   100%   13,824  $288,178  $20.85   100%   
    South Dakota                                      
 
580
  Watertown, SD Watertown Mall
1300 9th Avenue		 56401 MM  Fee  1977  1/2*  100%   240,262  $1,322,851  $6.63   83.1%  Dunham’s Sporting Goods (2011), Herberger’s (2014),
JCPenney (2013), Hy-Vee Supermarket (Not Owned)
    Tennessee                                      
 
581
  Brentwood, TN Cool Springs Pointe
I-65 & Moore’s Lane		 37027 SC  Fee (3) 1999/2004  2000   14.5%   201,414  $2,208,987  $13.54   81%  Best Buy (2014), Ross Dress For Less (2015), DSW Shoe
Warehouse (2009)
 
582
  Chattanooga, TN Overlook at Hamilton Place
2288 Gunbarrel Road		 37421 SC  Fee  1992/2004  2003   100%   207,244  $1,805,781  $8.78   99.2%  Best Buy (2014), Hobby Lobby (2014), Fresh Market (2014)
 
583
  Columbia, TN Columbia Square
845 Nashville Highway		 38401 SC  Fee (3) 1993  2003   10%   68,948  $458,900  $7.62   87.4%  Kroger (2022)
 
584
  Farragut, TN Farragut Pointe
11132 Kingston Pike		 37922 SC  Fee (3) 1991  2003   10%   71,311  $470,938  $7.54   87.6%  Food City (2011)
 
585
  Goodlettsville, TN Northcreek Commons
101-139 Northcreek Boulevard		 37072 SC  Fee (3) 1987  2003   20%   84,441  $733,139  $8.91   97.5%  Kroger (2012)
 
586
  Hendersonville, TN Lowe’s Home Improvement Center - Hendersonville
1050 Lowe’s Road		 37075 SC  Fee  1999  2003   100%   133,144  $1,222,439  $9.18   100%  Lowe’s (2019)
 
587
  Jackson, TN West Towne Commons
41 Stonebrook Place		 38305 SC  Fee (3) 1992  2007   20%   62,925  $579,341  $9.21   100%  Kroger (2020)
 
588
  Johnson City, TN Johnson City MarketplaceFranklin &
Knob Creek Roads		 37604 SC  GL  2005  2003   100%   11,749  $531,918  $15.23   100%  Kohl’s (2026)
 
589
  Knoxville, TN Pavilion of Turkey Creek I
10936 Parkside Drive		 37922 SC  Fee (3) 2001  2007   15%   280,776  $3,169,800  $13.11   86.1%  Ross Dress For Less (2014), Office Max (2017), Old Navy
(2011), Goody’s (2015), Target (Not Owned), Wal-Mart (Not Owned)


64

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
590
  Knoxville, TN Town & Country
North Peters Road & Town & Country
Circle		 37923 SC  Fee (3) 1985/1997  2007   15%   638,437  $6,180,411  $10.25   94.4%  Goody’s (2013), Jo-Ann Stores (2013), Circuit City (2014), Staples (2019), Best Buy (2019), Food City (2026), Lowe’s (2017), Carmike Cinemas (2020), Dick’s Clothing and
Sporting Goods (2017)
 
591
  Memphis, TN American Way
4075 American Way		 38118 SC  Fee (3) 1988  2007   20%   121,222  $899,534  $8.15   91.1%  Kroger (2020)
 
592
  Morristown, TN Crossroads Square
130 Terrace Lane		 37816 SC  Fee (3) 2004  2007   20%   68,500  $610,500  $9.25   96.4%  T.J. Maxx (2014)
 
593
  Murfreesboro, TN Towne Centre
Old Fort Parkway		 37129 SC  Fee (3) 1998  2003   14.5%   108,023  $1,367,278  $12.66   100%  T.J. Maxx (2010), Books-A-Million(2009), Toys “R” Us (Not Owned), Lowe’s (Not Owned), Target (Not Owned)
 
594
  Nashville, TN Willowbrook Commons
61 East Thompson Lane		 37211 SC  Fee (3) 2005  2007   20%   93,600  $719,155  $8.66   88.7%  Kroger (2029)
 
595
  Nashville, TN Bellevue Place
7625 Highway 70 South		 37221 SC  Fee (3) 2003  2007   15%   77,180  $859,950  $12.15   91.7%  Michaels (2012), Bed Bath & Beyond (2012), Home Depot (Not Owned)
 
596
  Nashville, TN The Marketplace
Charlotte Pike		 37209 SC  Fee (3) 1998  2003   14.5%   167,795  $1,672,820  $10.05   99.2%  Lowe’s (2019), Wal Mart (Not Owned)
 
597
  Oakland, TN Oakland Market Place
7265 U.S. Highway 64		 38060 SC  Fee (3) 2004  2007   20%   64,600  $420,847  $6.97   93.5%  Kroger (2028)
    Texas                                      
 
598
  Allen, TX Watters Creek
Bethany Road		 75013 LC  Fee (3) 2008  1*  10%   244,911  $5,806,978  $22.75   100%  United Market Street (2028), Borders (2018)
 
599
  Austin, TX The Shops at Tech Ridge
Center Ridge Drive		 78728 SC  Fee (3) 2003  2003   25.75%   282,798  $3,444,656  $14.62   82.4%  Ross Dress For Less (2014), Toys “R” Us (2014), Hobby Lobby (2018), Best Buy (2017), Super Target (Not Owned)
 
600
  Baytown, TX Lowe’s Home Improvement - Baytown
5002 Garth Road		 77521 SC  Fee  1998  2007   100%   125,357  $873,828  $6.97   100%  Lowe’s (2015)
 
601
  Fort Worth, TX CVS Pharmacy
2706 Jacksboro Highway		 76114 SC  Fee  1997  2007   100%   10,908  $239,784  $21.98   100%   
 
602
  Fort Worth, TX CVS Pharmacy
4551 Sycamore School Road		 76133 SC  Fee  1997  2007   100%   9,504  $149,248  $15.70   100%   
 
603
  Frisco, TX Frisco Marketplace
7010 Preston Road		 75035 SC  Fee (3) 2003  2003   14.5%   20,959  $752,050  $20.33   100%  Kohl’s (2023)


65

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
604
  Garland, TX Garland Plaza
3265 Broadway Boulevard		 75043 SC  Fee  1994  2007   100%   70,576  $0  $0.00   0%   
 
605
  Grand PrairIe, TX Kroger - Grand Prairie
2525 West Interstate 20		 75052 SC  Fee  1998  2007   100%   60,835  $433,615  $7.13   100%  Kroger (2018)
 
606
  Houston, TX Lowe’s Home Improvement - Houston
19935 Katy Freeway		 77094 SC  Fee  1998  2007   100%   131,644  $917,000  $6.97   100%  Lowe’s (2017)
 
607
  Irving, TX MacArthur Marketplace
Market Place Boulevard		 75063 SC  Fee (3) 2004  2003   14.5%   146,941  $2,107,168  $10.85   100%  Kohl’s (2021), Hollywood Theaters (2016), Office Max
(2014), Sam’s Club (Not Owned), Wal-Mart (Not Owned)
 
608
  Lewisville, TX Lakepointe Crossings
South Stemmons Freeway		 75067 SC  Fee (3) 1991  2002   14.5%   315,008  $2,840,134  $10.79   84.1%  99 Cents Only Store (2009), PetSmart (2009), Best Buy
(2010), Academy Sports (2016), Mardel Christian Bookstore (2012), Conn’s Appliance (Not Owned), Garden Ridge (Not Owned), Toys “R”’ Us (Not Owned)
 
609
  McKinney, TX McKinney Marketplace
U.S. Highway 75 & El Dorado Parkway		 75070 SC  Fee (3) 2000  2003   14.5%   118,967  $1,239,848  $10.78   96.6%  Kohl’s (2021), Albertson’s (Not Owned)
 
610
  Mesquite, TX Marketplace at Towne Center
Southbound Frontage Road I 635		 75150 SC  Fee (3) 2001  2003   14.5%   170,625  $2,215,973  $14.68   82.2%  PetSmart (2017), Michaels(2012), Ross Dress For Less (2013), Home Depot (Not Owned), Kohl’s (Not Owned)
 
611
  North Richland Hills, TX CVS Pharmacy
4808 Davis Boulevard		 76180 SC  Fee  1997  2007   100%   10,908  $237,324  $21.76   100%   
 
612
  Pasadena, TX Kroger Junction
2619 Red Bluff Road		 77506 SC  Fee (3) 1984  2007   20%   80,753  $446,479  $6.19   89.3%  Kroger (2020)
 
613
  Richardson, TX CVS Pharmacy
2090 Arapahoe Boulevard		 75081 SC  Fee  1997  2007   100%   10,560  $206,585  $19.56   100%   
 
614
  Rowlett, TX Rowlett Plaza
8800 Lakeview Parkway		 75088 SC  Fee  1995/2001  2007   100%   63,117  $0  $0.00   0%   
 
615
  San Antonio, TX Ingram Park
6157 N.W. Loop 410		 78238 MV  Fee  1985  2005   50%   76,597  $0  $0.00   0%   


66

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Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
616
  San Antonio, TX Bandera Pointe
North State Loop
1604 Bandera Road		 78227 SC  Fee  2001/2002  2002   100%   278,815  $4,285,314  $16.06   91.6%  Lowe’s (2020), T.J. Maxx (2011), Old Navy (2011), Ross Dress For Less (2012), Barnes & Noble (2011), Kohl’s (Not
Owned), Raquetball & Fitness (Not Owned), Credit Union (Not Owned), Chuck E Cheese (Not Owned), Target (Not Owned)
 
617
  San Antonio, TX Village at Stone Oak
22610 U.S. Highway 281 North		 78258 SC  Fee  2007  1*  100%   300,834  $4,946,638  $16.35   97.1%  Hobby Lobby (2022), T.J. Maxx (2017)
 
618
  San Antonio, TX Westover Marketplace
State Highway 151 at Loop 410		 78209 SC  Fee (3) 2005  1*  10%   218,257  $3,195,057  $14.58   97.8%  PetSmart (2016), Sportsman’s Warehouse (2015), Ross Dress
For Less (2016), Target (Not Owned), Lowe’s (Not Owned)
 
619
  San Antonio, TX Terrell Plaza
1201 Austin Highway		 78209 SC  Fee (3) 1958/1986  2007   50%   170,333  $1,164,162  $6.94   98.5%  Big Lots (2010)
 
620
  Tyler, TX CVS Pharmacy
1710 West Gentry Parkway		 75702 SC  Fee  1997  2007   100%   9,504  $134,773  $14.18   100%   
    Utah                                      
 
621
  Midvale, UT Family Center at Fort Union 50
900 East Fourt Union Boulevard		 84047 SC  Fee  1973/2000  1998   100%   641,957  $8,022,197  $13.58   92%  Babies “R” Us (2014), Office Max (2012), Smith’s Food &
Drug (2024), Media Play (2016), Bed Bath & Beyond (2014), Wal-Mart (2015), Ross Dress For Less (2016), Michaels
(2017)
 
622
  Ogden, UT Family Center at Ogden 5-Points
21-129 Harrisville Road		 84404 SC  Fee  1977  1998   100%   162,316  $797,109  $5.69   86.3%  Harmons (2012)
 
623
  Orem, UT Family Center at Orem
1300 South Street		 84058 SC  Fee  1991  1998   100%   150,667  $1,677,708  $11.14   100%  Toys “R” Us (2011), Media Play (2015), Office Depot (2008), Jo-Ann Stores (2012), R.C. Willey (Not Owned)


67

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Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
624
  Riverdale, UT Family Center at Riverdale
1050 West Riverdale Road		 84405 SC  Fee  1995/2003  1998   100%   593,398  $5,001,984  $8.66   95.9%  Macy’s (2011), Office Max (2010), Gart Sports (2012),
Sportsman’s Warehouse (2009), Target (2017), Media Play (2009), Circuit City (2016)
 
625
  Riverdale, UT Family Center at Riverdale
1050 West Riverdale Road		 84405 SC  Fee  2005  1*  100%   46,597  $476,421  $10.22   100%  Jo-Ann Stores (2015), Super Wal-Mart (Not Owned), Sam’s Club (Not Owned)
 
626
  Salt Lake City, UT Family Place at 33rd South
3300 South Street		 84115 SC  Fee  1978  1998   100%   34,209  $216,409  $9.08   69.7%   
 
627
  Taylorsville, UT Family Center at Taylorsville
5600 South Redwood		 84123 SC  Fee  1982/2003  1998   100%   697,630  $6,367,218  $10.89   83.1%  ShopKo (2014), Jo-Ann Stores (2015), Gart Sports (2017), 24
Hour Fitness (2017), PetSmart (2018), Bed Bath & Beyond
(2015), Ross Dress For Less (2014), Media Play (2009),
Harmons Superstore (Not Owned)
    Vermont                                      
 
628
  Berlin, VT Berlin Mall
282 Berlin Mall Road.,
Unit #28		 05602 MM  Fee  1986/1999  2*  100%   174,624  $1,508,464  $9.63   89.7%  Wal-Mart (2014), JCPenney (2009)
    Virginia                                      
 
629
  Chester, VA Bermuda Square
12607-12649 Jefferson Davis		 23831 SC  Fee  1978  2003   100%   114,589  $1,457,608  $13.19   92.6%  Ukrop’s (2013)
 
630
  Fairfax, VA Fairfax Towne Center
12210 Fairfax Towne Center		 22033 SC  Fee (3) 1994  1995   14.5%   253,298  $4,167,839  $18.28   90%  Safeway (2019), T.J. Maxx (2009), Bed Bath & Beyond (2010), United Artists Theatre (2014)
 
631
  Glen Allen, VA Creeks at Virginia Center
9830-9992 Brook Road		 23059 SC  Fee (3) 2002  2007   15%   266,308  $3,899,001  $14.71   99.5%  Barnes & Noble (2011), Circuit City (2022), Bed Bath & Beyond (2012), Michaels (2011), Dick’s Clothing and
Sporting Goods (2017)
 
632
  Lynchburg, VA Candlers Station
3700 Candlers Mountain Road		 24502 SC  Fee  1990  2003   100%   270,765  $1,739,225  $9.72   66.2%  Cinemark (2015), Staples (2013), T.J. Maxx (2011) Toys “R”
Us (Not Owned)


68

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
633
  Lynchburg, VA Wards Crossing
Wards Road & Wards Ferry Road		 24502 SC  Fee (3) 2001  2007   15%   80,937  $1,161,822  $14.92   96.2%  Bed Bath & Beyond (2013), Michaels (2011), Target (Not
Owned), Dick’s Clothing and Sporting Goods (Not Owned),
PetSmart (Not Owned)
 
634
  Martinsville, VA Liberty Fair Mall
240 Commonwealth Boulevard		 24112 MM  Fee (3) 1989/1997  1/2*  50%   435,057  $2,748,239  $6.98   89.9%  Goody’s (2011), Belk (2012), JCPenney (2009), Sears (2009), Office Max (2012), Kroger (2017)
 
635
  Midlothian, VA Chesterfield Crossings
Highway 360 & Warbro Road		 23112 SC  Fee (3) 2000  2007   15%   79,802  $1,126,797  $14.15   87.6%  Ben Franklin Crafts (2015), Wal-Mart (Not Owned)
 
636
  Midlothian, VA Commonwealth Center
4600-5000 Commonwealth Center
Parkway		 23112 SC  Fee (3) 2002  2007   15%   165,413  $2,227,617  $13.81   97.5%  Stein Mart (2011), Michaels (2011), Barnes & Noble (2012)
 
637
  Newport News, VA Denbigh Village
Warwick Boulevard & Denbigh
Boulevard		 23608 SC  Fee  1998/2006  2007   100%   324,450  $2,513,298  $8.15   88.3%  Burlington Coat Factory (2013), Kroger (2017)
 
638
  Newport News, VA Jefferson Plaza
121 Jefferson Avenue		 23602 SC  Fee (3) 1999  2007   15%   47,341  $320,486  $17.60   38.5%  Costco (Not Owned)
 
639
  Richmond, VA Downtown Short Pump
11500-900 West Broad Street		 23233 SC  Fee  2000  2007   100%   126,055  $2,475,280  $21.29   92.2%  Barnes & Noble (2011), Regal Cinemas (2021)
 
640
  Springfield, VA Loisdale Center
6646 Loisdale Road		 22150 SC  Fee  1999  2007   100%   120,742  $2,469,392  $20.45   100%  Barnes & Noble (2015), DSW Shoe Warehouse (2015), Bed Bath & Beyond (2015), Circuit City (2020)
 
641
  Springfield, VA Spring Mall Center
6717 Spring Mall Road		 22150 SC  Fee  1995/2001  2007   100%   56,511  $998,611  $17.67   100%  Michaels (2010), Tile Shop (2018)
 
642
  Sterling, VA Cascade Marketplace
NEC of Cascades Parkway & Route 7		 20165 SC  Fee  1998  2007   100%   101,606  $1,547,669  $15.23   100%  Staples (2013), Sports Authority (2016)
 
643
  Virginia Beach, VA Kroger Plaza
1800 Republic Drive		 23454 SC  Fee (3) 1997  2007   20%   63,324  $240,788  $3.80   100%  Kroger (2020)
 
644
  Waynesboro, VA Waynesboro Commons
109 Lee Dewitt Boulevard		 22980 SC  Fee (3) 1993  2007   20%   52,415  $388,310  $8.96   82.6%  Kroger (2018)


69

Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
645
  Winchester, VA Apple Blossom Corners
2190 South Pleasant Valley		 22601 SC  Fee (3) 1990/1997  2*  20%   240,560  $2,470,504  $10.26   98.5%  Martin’s Food Store (2040), Kohl’s (2018), Office Max
(2012), Books-A-Million (2013)
 
646
  Wytheville, VA Wytheville Commons
215-295 Commonwealth Drive		 24382 SC  Fee (3) 2004  2007   15%   90,239  $1,078,914  $11.96   100%  Goody’s (2016), Lowe’s (Not Owned), Super Wal-Mart (Not
Owned)
    Washington                                      
 
647
  Kirkland, WA Totem Lake Upper
Totem Lakes Boulevard		 98034 SC  Fee (3) 1999/2004  2004   20%   253,867  $2,232,000  $16.84   55.5%  Guitar Center (2009), Ross Dress For Less (2015)
 
648
  Olympia, WA Circuit City - Olympia
2815 Capital Mall Drive S.W.		 98502 SC  Fee  1998  2007   100%   35,776  $443,929  $12.41   100%  Circuit City (2018)
    West Virginia                                      
 
649
  Barboursville, WV Barboursville Center
5-13 Mall Road		 25504 SC  GL  1985  1998   100%   70,900  $198,950  $4.51   62.3%  Discount Emporium (2006), Value City (Not Owned)
 
650
  Morgantown, WV Glenmark Center
Interstate 68 & Pierpont Road		 26508 SC  Fee  1999/2000  2007   100%   111,278  $1,222,729  $9.90   100%  Shop ’n Save (2009), Michaels (2011)
 
651
  Weirton, WV Rite Aid
1360 Cove Road		 26062 SC  Fee  2000  2007   100%   10,908  $221,870  $20.34   100%   
    Wisconsin                                      
 
652
  Brookfield, WI Shoppers World Brookfield
North 124th Street & West Capital Drive		 53005 SC  Fee (3) 1967  2003   14.5%   182,722  $1,445,801  $7.91   100%  T.J. Maxx (2010), Marshalls Mega Store (2009), Office Max
(2010), Burlington Coat Factory (2012)
 
653
  Brown Deer, WI Brown Deer Center
North Green BayRoad		 53209 SC  Fee (3) 1967  2003   14.5%   266,716  $2,034,560  $7.77   98.1%  Kohl’s (2023), Michaels (2012), Office Max (2010), T.J. Maxx (2012), Old Navy (2012)
 
654
  Brown Deer, WI Marketplace of Brown DeerNorth
Green Bay Road		 53209 SC  Fee (3) 1989  2003   14.5%   143,372  $1,184,414  $8.26   100%  Marshalls Mega Store (2009), Pick ’n Save (2010)
 
655
  Milwaukee, WI Point Loomis
South 27th Street		 53221 SC  Fee  1962  2003   100%   160,533  $707,569  $4.41   100%  Kohl’s (2012), Pick ’n Save (2012)
 
656
  Oshkosh, WI Walgreens - Oshkosh
South 27th Street		 54902 SC  Fee  2005  2007   100%   13,905  $305,910  $22.00   100%   


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Table of Contents

 
                                           
Developers Diversified Realty Corporation
Shopping Center Property List at December 31, 2008
                  Company-
   Average
    
                  Owned
   Base
    
        Type of
   Year
   DDR
 Gross
 Total
 Rent
    
      Zip
 Property
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 (per SF)
 Percent
  
  Center/Property Location Code (1) Interest Redeveloped Acquired Interest Area (SF) Rent (2) Occupied Anchor Tenants (Lease Expiration)
 
 
657
  Racine, WI Village Center Outlot
Washington Avenue Village Center Drive		 53406 SC  Fee (3) 2003  2007   20%   227,887  $2,461,641  $10.93   98.8%  Jewel (2022), Kohl’s (2023)
 
658
  West Allis, WI West Allis Center
West Cleveland Avenue & South 108		 53214 SC  Fee  1968  2003   100%   246,081  $1,463,410  $5.64   100%  Kohl’s (2018), Marshalls Mega Store (2009), Pick ’n Save (2013)
 
 
1*Property developed by the Company.
 
2*Original IPO Property.
 
(1)“SC” indicates a power center or a community shopping center, “LC” indicates a lifestyle center, “MM” indicates an enclosed Mall, and “MV” indicates a Mervyns site.
 
(2)Calculated as total annualized base rentals divided by Company-owned GLA actually leased as of December 31, 2008.
 
(3)One of the two hundred eighty-five (285) properties owned through unconsolidated joint ventures, which serve as collateral for joint venture mortgage debt aggregating approximately $5.8 billion (of which the Company’s proportionate share is $1,216.1 million) as of December 31, 2008, and which is not reflected in the consolidated indebtedness.


71

Table of Contents

 
 
                                         
Developers Diversified Realty Corporation
Service Merchandise Joint Venture Property List at December 31, 2008
                Company-
        
                Owned
   Average
    
          Year
   DDR
 Gross
 Total
 Base
    
    Zip
 Type of
 Ownership
 Developed/
 Year
 Ownership
 Leaseable
 Annualized
 Rent
 Percent
  
Center/Property Location Code Property(1) Interest(3) Redeveloped Acquired Interest Area (SF) Base Rent (Per SF)(2) Leased Anchor Tenants (Lease Expiration)
 
Alabama
                                        
1 Huntsville, AL
 930 A Old Monrovia Road  35806  SC Fee  1984   2002   20%  54,200  $381,500  $7.04   100% H.H. Gregg Appliances (2014)
Arizona
                                        
2 Mesa, AZ
 6233 East Southern Boulevard  85206  SC Fee  1991   2002   20%  53,312  $782,765  $14.68   100% Ashley Furniture Homestore (2013)
Connecticut
                                        
3 Danbury, CT
 67 Newton Road  06810  SC Lease  1978   2002   20%  51,750  $543,000  $10.49   100% Homegoods (2012), Namco Pool Supplies (2012)
4 Manchester, CT
 1520 Pleasant Valley Road  06040  SC GL  1993   2002   20%  49,905  $509,579  $10.21   100% Michaels (2014), PetSmart (2014)
Delaware
                                        
5 Dover, DE
 1380 North Dupont Highway  19901  SC Fee  1992   2002   20%  50,001  $352,047  $7.04   100% Furniture & More (2009), PetSmart (2011)
Florida
                                        
6 Bradenton, FL
 825 Cortez Road West  34207  SC Lease  1995   2002   20%  53,638  $330,870  $6.17   100% Bed Bath & Beyond (2018), Michaels (2014)
7 Jensen Beach, FL
 3257 N.W. Federal Highway  34957  SC GL  1989   2002   20%  50,000  $195,368  $7.31   53.5% Office Depot (2011)
8 Ocala, FL
 2405 Southwest 27th Avenue  32671  SC Lease  1981   2002   20%  54,816  $314,140  $5.73   100% Kimco Ocala (2012), Beall’s Outlet (2012)
9 Orlando, FL
 7175 West Colonial Drive  32818  SC Fee  1989   2005   20%  51,550  $0  $0.00   0%  
10 Pensacola, FL
 7303 Plantation Road  32504  SC Fee  1976   2004   20%  64,053  $800,663  $12.50   100% American Water Works (2015)
11 St. Petersburg, FL
 2500 66th Street North  33710  SC Fee  1975   2002   20%  76,438  $1,099,479  $13.27      Jo-Ann Stores (2014), Homegoods (2016)
Georgia
                                        
12 Duluth, GA
 2075 Market Street  30136  SC Fee  1983   2002   20%  56,225  $325,901  $5.80   100% Mega Amusement (2013)
Illinois
                                        
13 Burbank, IL
 7600 South Lacrosse Avenue  60459  SC Fee  1984   2002   20%  27,213  $162,000  $11.73   50.8%  
14 Crystal Lake, IL
 5561 Northwest Highway  60014  SC Fee  1989   2002   20%  50,092  $335,300  $8.02   83.4% Big Lots (2012)
15 Downers Grove, IL
 1508 Butterfield Road  60515  SC Lease  1973   2002   20%  35,943  $0  $0.00   0%  
16 Lansing, IL
 16795 South Torrence Avenue  60438  SC Fee  1986   2002   20%  51,177  $391,948  $8.26   92.7% Pay/Half (2017)


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Table of Contents

 
                                         
Developers Diversified Realty Corporation
Service Merchandise Joint Venture Property List at December 31, 2008
                Company-
        
                Owned
   Average
    
          Year
   DDR
 Gross
 Total
 Base
    
    Zip
 Type of
 Ownership
 Developed/
 Year
 Ownership
 Leaseable
 Annualized
 Rent
 Percent
  
Center/Property Location Code Property(1) Interest(3) Redeveloped Acquired Interest Area (SF) Base Rent (Per SF)(2) Leased Anchor Tenants (Lease Expiration)
 
Indiana
                                        
17 Evansville, IN
 300 North Green River Road  47715  SC Lease  1978   2002   20%  60,000  $384,738  $9.23   69.5% Bed Bath & Beyond (2014)
Kentucky
                                        
18 Lexington, KY
 1555 New Circle Road  40509  SC Lease  1978   2002   20%  60,000  $367,684  $6.13   100% Homegoods (2014), The Tile Shop (2013)
19 Louisville, KY
 4601 Outer Loop Road  40219  SC Fee  1973   2002   20%  49,410  $309,701  $6.27   100% PetSmart (2018), A.J. Wright (2014)
20 Paducah, KY
 5109 Hinkleville Road  42001  SC Fee  1984   2002   20%  52,500  $0  $0.00   0%  
Louisiana
                                        
21 Baton Rouge, LA
 9501 Cortana Mall  70815  SC Fee  1997   2004   20%  90,000  $148,900  $1.65   100% Flor-Line Associates (2013)
22 Bossier City, LA
 2950 East Texas Street  71111  SC Fee  1982   2003   20%  58,500  $0  $0.00   0%  
23 Houma, LA
 1636 Martin Luther King Boulevard  70360  SC Fee  1992   2002   20%  49,721  $324,689  $8.12   80.4% Best Buy (2015), Bed Bath & Beyond (2018)
Massachusetts
                                        
24 Burlington, MA
 34 Cambridge Street  01803  SC Lease  1978   2002   20%  70,800  $898,814  $12.70   100% E & A Northeast (2014), Off Broadway Shoes (2014)
25 Swansea, MA
 58 Swansea Mall Drive  02777  SC GL  1985   2002   20%  49,980  $307,380  $6.15   100% Pricerite Supermarket (2016)
Michigan
                                        
26 Westland, MI
 7638 Nankin Road  48185  SC Fee  1980   2002   20%  50,000  $0  $0.00   0%  
Mississippi
                                        
27 Hattiesburg, MS
 1000 Turtle Creek Drive  39402  SC Fee  1995   2002   20%  50,809  $406,472  $8.00   100% Circuit City (2020)
Nevada
                                        
28 Las Vegas, NV
 4701 Faircenter Parkway  89102  SC Lease  1990   2004   20%  24,975  $174,825  $7.00   100% Michaels (2011)
New Hampshire
                                        
29 Salem, NH
 271 South Broadway  03079  SC Lease  1985   2003   20%  50,110  $604,779  $12.07   100% Bed Bath & Beyond (2011), A.C. Moore (2016)
New Jersey
                                        
30 Paramus, NJ
 651 Route 17 East  06117  SC Lease  1978   2003   20%  54,850  $958,740  $19.52   89.6% Homegoods (2013)
31 Wayne, NJ
 Route 23 West Belt Plaza  07470  SC Lease  1978   2002   20%  49,157  $797,714  $16.23   100% Homegoods (2010), PetSmart (2015)

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Developers Diversified Realty Corporation
Service Merchandise Joint Venture Property List at December 31, 2008
                Company-
        
                Owned
   Average
    
          Year
   DDR
 Gross
 Total
 Base
    
    Zip
 Type of
 Ownership
 Developed/
 Year
 Ownership
 Leaseable
 Annualized
 Rent
 Percent
  
Center/Property Location Code Property(1) Interest(3) Redeveloped Acquired Interest Area (SF) Base Rent (Per SF)(2) Leased Anchor Tenants (Lease Expiration)
 
New York
                                        
32 Middletown, NY
 88-25 Dunning Road  10940  SC Lease  1989   2002   20%  50,144  $430,608  $8.59   100% Homegoods (2010), PetSmart (2010)
North Carolina
                                        
33 Raleigh, NC
 U.S. 17 Millbrook  27604  SC Fee  1994   2002   20%  50,000  $457,028  $9.14   100% A.C. Moore (2010), K & G Menswear (2014)
Oklahoma
                                        
34 Warr Acres, OK
 5537 Northwest Expressway  73132  SC Fee  1985   2002   20%  50,000  $0  $0.00   0%  
South Carolina
                                        
35 N. Charleston, SC
 7400 Rivers Avenue  29418  SC Fee  1989   2002   20%  50,000  $333,612  $6.67   100% DDR (2011), Dollar Tree (2013)
Tennessee
                                        
36 Antioch, TN
 5301 Hickory Hollow Parkway  37013  SC Fee  1984   2002   20%  59,319  $558,821  $9.42   100% Office Depot (2010), Bed Bath & Beyond (2018)
37 Franklin, TN
 1735 Galleria Boulevard  37064  SC Fee  1992   2002   20%  60,000  $705,606  $11.76   100% H.H. Gregg Appliances (2010), Wild Oats
Markets (2014)
38 Knoxville, TN
 9333 Kingston Pike  37922  SC Fee  1986   2002   20%  50,092  $262,983  $5.25   100% Hobby Lobby (2010)
Texas
                                        
39 Baytown, TX
 6731 Garth Road  77521  SC Fee  1981   2002   20%  52,288  $0  $0.00   0%  
40 Longview, TX
 3520 McCann Road  75605  SC Fee  1978   2004   20%  40,524  $324,192  $8.00   100% Stage (2015)
41 McAllen, TX
 6600 U.S. Expressway 83  78503  SC Fee  1993   2002   20%  63,445  $530,664  $8.36   100% Michaels (2012), Bed Bath & Beyond (2018)
42 Richardson, TX
 1300 East Beltline  75081  SC Fee  1978   2002   20%  62,463  $454,600  $7.28   100% Staples (2011), Conn’s Appliance (2014)
43 Sugar Land, TX
 15235 South West Freeway  77478  SC GL  1992   2002   20%  50,000  $350,000  $7.00   100% Conn’s Appliance (2018)
Virginia
                                        
44 Chesapeake, VA
 4300 Portsmouth Boulevard  23321  SC GL  1990   2002   20%  50,062  $384,683  $7.68   100% PetSmart (2016), Michaels (2011)
 
 
(1)SC indicates a power center or a community shopping center.
 
(2)Calculated as total annualized base rentals divided by Company-owned GLA actually leased as of December 31, 2008.
 
(3)See footnote 3 of the Shopping Center Property List on page 64 describing indebtedness.

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Developers Diversified Realty Corporation
Business Center Property List at December 31, 2008
                  Company-
      
                  Owned
      
            Year
   DDR
 Gross
 Total
 Average
  
      Zip
 Type of
 Ownership
 Developed/
 Year
 Ownership
 Leasable
 Annualized
 Base
 Percent
  Center/Property Location Code Property(1) Interest Redeveloped Acquired Interest Area (SF) Rent Rent (Per SF)(2) Leased
 
    Maryland                                    
 1  Silver Springs, MD(I) Tech Center 29 Phase I
2120-2162 Tech Road		 20904 IND Fee  1970   2001   100%   175,410  $1,523,239  $9.39   79.3% 
 2  Silver Springs, MD(II) Tech Center 29 Phase II
2180 Industrial Parkway		 20904 IND Fee  1991   2001   100%   58,280  $248,329  $13.95   17.9% 
 3  Silver Springs, MD(III) Tech Center 29 Phase III
12200 Tech Road		 20904 OFF Fee  1988   2001   100%   55,422  $1,335,138  $24.09   100% 
    Ohio                                    
 4  Twinsburg, OH Heritage Business I
9177 Dutton Drive		 44087 IND Fee  1990   2*  100%   35,866  $96,932  $8.31   32.5% 
    Pennsylvania                                    
 5  Erie, PA 38th Street Plaza
2301 West 38th Street		 16506 IND GL  1973   2*  100%   96,000  $328,650  $6.02   56.9% 
    Utah                                    
 6  Salt Lake City, UT The Hermes Building 455 East 500 South Street 84111 IND Fee  1985   1998   100%   53,476  $683,673  $16.41   77.5% 
 
 
2* Original IPO Property transferred to American Industrial Properties (“AIP”) in 1998 and reacquired in 2001 through AIP merger.
 
(1)These properties are classified in the Company’s business center segment. “OFF” indicates office property and “IND” indicates industrial property.
 
(2)Calculated as total annualized base rentals divided by Company-owned GLA actually leased as of December 31, 2008.


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Item 3.  LEGAL PROCEEDINGS
 
Other than routine litigation and administrative proceedings arising in the ordinary course of business, the Company is not presently involved in any litigation nor, to its knowledge, is any litigation threatened against the Company or its properties that is reasonably likely to have a material adverse effect on the liquidity or results of operations of the Company.
 
Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
No matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.
 
EXECUTIVE OFFICERS
 
(a) The executive officers of the Company are as follows:
 
       
Name
 
Age
 
Position and Office With the Company
 
Scott A. Wolstein
  56  Chairman of the Board of Directors and Chief Executive Officer
Daniel B. Hurwitz
  44  President and Chief Operating Officer
David J. Oakes
  30  Senior Executive Vice President of Finance and Chief Investment Officer
Paul W. Freddo
  53  Senior Executive Vice President of Leasing and Development
Joan U. Allgood
  56  Executive Vice President — Corporate Transactions and Governance
Richard E. Brown
  57  Executive Vice President — International
Timothy J. Bruce
  51  Executive Vice President of Development
John S. Kokinchak
  49  Executive Vice President of Property Management
William H. Schafer
  50  Executive Vice President and Chief Financial Officer
Robin R. Walker-Gibbons
  52  Executive Vice President of Leasing
Christa A. Vesy
  38  Senior Vice President and Chief Accounting Officer
 
Scott A. Wolstein has been the Chief Executive Officer and a Director of the Company since its organization in 1992. Mr. Wolstein has been Chairman of the Board of Directors of the Company since May 1997. Prior to the organization of the Company, Mr. Wolstein was a principal and executive officer of Developers Diversified Group (“DDG”), the Company’s predecessor. Mr. Wolstein graduated cum laude from both the Wharton School at the University of Pennsylvania and the University of Michigan Law School. Following law school, Mr. Wolstein was associated with the law firm of Thompson, Hine & Flory. He is currently a member of the Board of Governors and Executive Committee of National Real Estate Investment Trusts (“NAREIT”), the Board of Directors of the Real Estate Roundtable, the Board of Trustees of Hathaway Brown School, the Board of Directors and Executive Committee Member of the Cleveland Chapter of the Red Cross, Board Member of the Cleveland Chapter of the Anti-Defamation League, the Board of Directors of University Hospitals Health System, Board Member of the Greater Cleveland Partnership, Board Member of the Cleveland Development Advisors and member of the Executive Committee and Board of Trustees of the Zell-Lurie Wharton Real Estate Center. He is also a current member of the Urban Land Institute (“ULI”), PREA and the World’s President Organization. He has also served as Chairman of the State of Israel Bonds-Ohio Chapter, a Trustee of the International Council of Shopping Centers (“ICSC”), President of the Board of Trustees of the United Cerebral Palsy Association of Greater Cleveland and as a member of the Board of the Great Lakes Theater Festival, The Park Synagogue and the Convention and Visitors Bureau of Greater Cleveland. Mr. Wolstein is a four-time recipient of the Realty Stock Review’s Outstanding CEO Award. In 2007, he received the Malden Mills Corporate Kindness Award from Project Love.
 
Daniel B. Hurwitz was appointed President and Chief Operating Officer of Developers Diversified Realty in May 2007. Mr. Hurwitz was the Senior Executive Vice President and Chief Investment Officer from May 2005


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through May 2007 and Executive Vice President of the Company from June 1999 through April 2005. He was a member of the Company’s Board of Directors from May 2002 to May 2004. Prior to joining the Company, Mr. Hurwitz served as Senior Vice President and Director of Real Estate and Corporate Development for Boscov’s Department Stores, Inc. Prior to Boscov’s, Mr. Hurwitz served as Development Director for the Shopco Group, a New York City-based developer and acquirer of regional and super regional shopping malls. Mr. Hurwitz is a graduate of Colgate University and the Wharton School of Business Executive Management Program at the University of Pennsylvania. A member of the Board of Directors of U-Store-It, a member of the Board of Trustees of Hawken School, a member of the Board of Regents for the University System of Ohio, and member of the Leadership Board for the Neurological Institute at the Cleveland Clinic. He is a member of ICSC and ULI and serves as a member of ICSC’s Open Air Centers Committee. In addition, he is a member of the Samuel Zell and Robert Lurie Real Estate Center at The Wharton School, University of Pennsylvania; where he serves in the Career Mentor Program. Mr. Hurwitz has also served on the Board of Directors of the Colgate University Alumni Corporation, Colgate University Maroon Council, Berks County Food Bank and the Reading Jewish Community Center, Boscov’s Department Store Inc., the Network and Vice Chairman of the Board for Summer on the Cuyahoga, a civic internship program.
 
David J. Oakes was appointed Senior Executive Vice President of Finance and Chief Investment Officer in December 2008. Mr. Oakes was the Executive Vice President of Finance and Chief Investment Officer from April 2007 to December 2008. Prior to joining the Company, Mr. Oakes served as Senior Vice President and portfolio manager at Cohen & Steers Capital Management from April 2002 through March 2007. Previously, he worked as a research analyst in global investment research at Goldman Sachs, where he covered U.S. REITs from June 1999 through April 2002. Mr. Oakes earned his bachelor’s degree at Washington University of St. Louis and is a Chartered Financial Analyst (“CFA”). He is a member of ICSC and NAREIT.
 
Paul W. Freddo was appointed Senior Executive Vice President of Leasing and Development in December 2008. Mr. Freddo joined the Company in August 2008 and served as Senior Vice President of Development-Western Region from August 2008 to December 2008. Prior to joining the Company, Mr. Freddo served as Vice President and Director of Real Estate for JCPenney from January 2004 through August 2008. Mr. Freddo earned his bachelor’s degree at Adelphi University. He is a member of the Executive Committee of the Board of Trustees of ICSC, a trustee for the Plano Economic Development Board, and a member of on the Board of Directors of The Network.
 
Joan U. Allgood was appointed Executive Vice President — Corporate Transactions and Governance in October 2005. Mrs. Allgood also serves as Corporate Secretary. Mrs. Allgood was the Senior Vice President — Corporate Affairs and Governance from 2002 to October 2005, the Company’s Senior Vice President and General Counsel from May 1999 to 2002, the Company’s Vice President and General Counsel from 1992, when the Company was organized as a public company, until May 1999, and General Counsel of its predecessor entities since 1987. Mrs. Allgood is a member of the ICSC, the American College of Real Estate Lawyers and the American, Ohio and Cleveland bar associations. She received her B.A. from Denison University in Granville, Ohio, and her J.D. from Case Western Reserve University School of Law in 1977. Mrs. Allgood also serves on the Board of Trustees of the YWCA, Cleveland Chapter and the Cleveland FoodBank.
 
Richard E. Brown was appointed Executive Vice President — International in October 2006. Mr. Brown was the Executive Vice President of Real Estate Operations from September 2005 to October 2006, the Senior Vice President of Real Estate Operations from March 2002 to October 2005, the Senior Vice President of Asset Management and Operations from February 2001 to March 2002 and Vice President of Asset Management and Operations from January 2000 to February 2001. From 1987 until joining the Company in 1996, Mr. Brown was Vice President of Asset Management of PREIT, located in Philadelphia, Pennsylvania, and Vice President of Retail Asset Management of the Balcor Company in Chicago, Illinois. Mr. Brown is a Canadian chartered accountant and received his bachelor of commerce from Carleton University in Ottawa, Canada. Mr. Brown is a member of ICSC.
 
Timothy J. Bruce was appointed Executive Vice President of Development in October 2005. Mr. Bruce was the Senior Vice President of Development from September 2002 to October 2005. Mr. Bruce oversees the development department for the Company’s nationwide retail real estate portfolio. From December 1998 to joining the Company in September 2002, Mr. Bruce served as Senior Vice President, Director of Leasing for Acadia Realty Trust in New York. Mr. Bruce earned his B.A. from the School of Architecture at the University of Illinois at Chicago and a


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master’s of management degree from the J.L. Kellogg Graduate School of Business at Northwestern University. Mr. Bruce is a member of ICSC.
 
William H. Schafer was appointed Executive Vice President and Chief Financial Officer in October 2005. Mr. Schafer was the Senior Vice President and Chief Financial Officer from May 1999 to October 2005, Vice President and Chief Financial Officer of the Company from its organization as a public company in 1993 and the Chief Financial Officer of its predecessor entities from April 1992. Mr. Schafer joined the Cleveland, Ohio, office of the Price Waterhouse LLP accounting firm in 1983 and served there as a Senior Manager from July 1990 until he joined the Company’s predecessor organization in 1992. Mr. Schafer graduated from the University of Michigan with a bachelor of arts degree in business administration. Mr. Schafer is a member of ICSC and serves as Treasurer on the Board of The Gathering Place, anot-for-profitorganization and the University of Akron’s Financial Advisory Board. Mr. Schafer also serves on U.S. Bank’s Northeast Ohio Advisory Board.
 
John S. Kokinchak was appointed Executive Vice President of Property Management in March 2008. Mr. Kokinchak was the Senior Vice President of Property Management from March 2006 to March 2008, and Vice President of Property Management, Speciality Centers from August 2004. Prior to joining the Company, Mr. Kokinchak served as Vice President of Property Management for Prism Asset Management Company from June 2001 to August 2004. Mr. Kokinchak is a member of ICSC’s Management and Marketing Conference Planning Committee, the Certified Leasing Specialist Test Committee and the Certified Shopping Center Manager Committee. During2008-2009,he is serving as the Dean for the ICSC University of Shopping Centers-School of Open Air Centers. Mr. Kokinchak serves on the advisory board of Specialty Retail Report, an industry publication.
 
Robin R. Walker-Gibbons was appointed Executive Vice President of Leasing in October 2005.Ms. Walker-Gibbonswas the Senior Vice President of Leasing for the Southeast Region from March 2005 to October 2005, Vice President of Leasing from November 1995 to March 2005 and a leasing manager from April 1995 to November 1995. Prior to joining the Company, Ms. Walker-Gibbons was President of Aroco, Inc., a retail brokerage and tenant representation firm based in Alabama. Ms. Walker-Gibbons is a graduate of the University of Alabama and a member of ICSC.
 
Christa A. Vesy was appointed Senior Vice President and Chief Accounting Officer in November 2006. From September 2004 to November 2006, Mrs. Vesy worked for The Lubrizol Corporation, where she served as manager of external financial reporting and then as controller for the lubricant additives business segment. Prior to joining Lubrizol, from 1993 to September 2004, Mrs. Vesy held various positions with the Assurance and Business Advisory Services group of PricewaterhouseCoopers LLP, a registered public accounting firm, including Senior Manager from 1999 to September 2004. Mrs. Vesy graduated with a bachelor of science degree in business administration from Miami University in Oxford, Ohio. Mrs. Vesy is a certified public accountant and member of the American Institute of Certified Public Accountants. She also serves on the Board of Trustees of the Boys & Girls Clubs of Cleveland.


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Part II
 
Item 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
The high and low sale prices per share of the Company’s common shares, as reported on the New York Stock Exchange (the “NYSE”) composite tape, and declared dividends per share for the quarterly periods indicated were as follows:
 
             
  High  Low  Dividends 
 
2008:
            
First
 $44.31  $32.20  $0.69 
Second
  45.66   34.44   0.69 
Third
  41.55   27.60   0.69 
Fourth
  31.50   1.73   — 
2007:
            
First
 $72.33  $61.43  $0.66 
Second
  66.70   50.75   0.66 
Third
  56.85   46.28   0.66 
Fourth
  59.27   37.42   0.66 
 
As of February 13, 2009, there were 9,655 record holders and approximately 44,000 beneficial owners of the Company’s common shares.
 
The Company’s Board of Directors approved a 2009 dividend policy that will maximize the Company’s free cash flow, while still adhering to Real Estate Investment trust (“REIT”) payout requirements. This payout policy will result in a 2009 annual dividend at the minimum distribution required to maintain REIT status. In addition, the Company is expected to pay a portion of its dividend in common shares which will be determined on a quarterly basis. The changes to the Company’s 2009 dividend policy should result in additional free cash flow, which is expected to be applied primarily to reduce leverage.
 
The Company intends to continue to declare quarterly dividends on its common shares. However, no assurances can be made as to the amounts of future dividends, since such dividends are subject to the Company’s cash flow from operations, earnings, financial condition, capital requirements and such other factors as the Board of Directors considers relevant. The Company is required by the Internal Revenue Code of 1986, as amended, to distribute at least 90% of its REIT taxable income. The amount of cash available for dividends is impacted by capital expenditures and debt service requirements to the extent that the Company were to fund such items out of cash flow from operations.
 
The Company has a dividend reinvestment plan under which shareholders may elect to reinvest their dividends automatically in common shares. Under the plan, the Company may, from time to time, elect to purchase common shares in the open market on behalf of participating shareholders or may issue new common shares to such shareholders.
 
On June 26, 2007, the Company’s Board of Directors authorized a common share repurchase program. Under the terms of the program authorized by the Board, the Company may purchase up to a maximum value of $500 million of its common shares over a two-year period. As of December 31, 2008, the Company had repurchased 5.6 million of its common shares at a gross cost of approximately $261.9 million at a weighted average cost of $46.66 per share under this program all of which occurred in 2007.


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ISSUER PURCHASES OF EQUITY SECURITIES
 
                     
        (c) Total
  (d) Maximum
    
        Number of
  Number (or
    
        Shares
  Approximate
    
        Purchased as
  Dollar Value) of
    
        Part of Publicly
  Shares that May
    
  (a) Total Number
  (b) Average
  Announced
  Yet Be Purchased
    
  of Shares
  Price Paid per
  Plans or
  Under the Plans or
    
  Purchased  Share  Programs  Programs (Millions)    
 
October 1 — 31, 2008
  —  $—   —  $—     
November 1 — 30, 2008
  —   —   —   —     
December 1 — 31, 2008
  —   —   —   —     
                     
Total
  —  $—   —  $—     


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Item 6.  SELECTED FINANCIAL DATA
 
The consolidated financial data included in the following table has been derived from the financial statements for the last five years and includes the information required by Item 301 ofRegulation S-K.The following selected consolidated financial data should be read in conjunction with the Company’s consolidated financial statements and related notes and “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
 
COMPARATIVE SUMMARY OF SELECTED FINANCIAL DATA
(Amounts in thousands, except per share data)
 
                     
  For the Years Ended December 31, 
  2008 (1)  2007 (1)  2006 (1)  2005 (1)  2004 (1) 
 
Operating Data:
                    
Revenues
 $931,472  $933,136  $773,351  $673,221  $526,130 
                     
Expenses:
                    
Rental operations
  354,838   320,081   256,199   223,908   175,093 
Impairment charges
  79,864   —   —   —   — 
Depreciation & amortization
  242,032   214,445   180,377   152,491   114,686 
                     
   676,734   534,526   436,576   376,399   289,779 
                     
Interest income
  5,473   8,772   9,050   9,973   4,197 
Interest expense
  (244,212)  (258,149)  (208,536)  (171,361)  (117,208)
Gain on repurchase of senior notes
  11,552   —   —   —   — 
Abandoned projects and transaction costs
  (12,433)  —   —   —   — 
Other expense, net
  (15,819)  (3,019)  (446)  (2,532)  (1,779)
                     
   (255,439)  (252,396)  (199,932)  (163,920)  (114,790)
                     
(Loss) income before equity in net income from joint ventures, impairment of joint ventures, minority interests, income tax benefit (expense) of taxable REIT subsidiaries and franchise taxes, discontinued operations, gain on disposition of real estate and cumulative effect of adoption of a new accounting standard
  (701)  146,214   136,843   132,902   121,561 
Equity in net income of joint ventures
  17,719   43,229   30,337   34,873   40,895 
Impairment of joint venture investments
  (106,957)  —   —   —   — 
Minority interests
  11,188   (18,218)  (8,893)  (6,852)  (4,331)
Income tax benefit (expense) of taxable REIT subsidiaries and franchise taxes
  17,434   14,669   2,497   (276)  (1,467)
                     
(Loss) income from continuing operations
  (61,317)  185,894   160,784   160,647   156,658 


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  For the Years Ended December 31, 
  2008 (1)  2007 (1)  2006 (1)  2005 (1)  2004 (1) 
 
Discontinued operations:
                    
Income from discontinued operations
  1,409   9,043   9,406   17,189   22,902 
(Loss) gain on disposition of real estate, net of tax
  (4,830)  12,259   11,051   16,667   8,561 
                     
   (3,421)  21,302   20,457   33,856   31,463 
                     
(Loss) income before gain on disposition of real estate
  (64,738)  207,196   181,241   194,503   188,121 
Gain on disposition of real estate
  6,962   68,851   72,023   88,140   84,642 
Cumulative effect of adoption of a new accounting standard
  —   —   —   —   (3,001)
                     
Net (loss) income
 $(57,776) $276,047  $253,264  $282,643  $269,762 
                     
Net (loss) income applicable to common shareholders
 $(100,045) $225,113  $198,095  $227,474  $219,056 
                     
(Loss) earnings per share data — Basic:
                    
(Loss) income from continuing operations
 $(0.80) $1.68  $1.63  $1.79  $1.97 
(Loss) income from discontinued operations
  (0.03)  0.18   0.19   0.31   0.33 
Cumulative effect of adoption of a new accounting standard
  —   —   —   —   (0.03)
                     
Net (loss) income applicable to common shareholders
 $(0.83) $1.86  $1.82  $2.10  $2.27 
                     
Weighted average number of common shares
  119,843   120,879   109,002   108,310   96,638 
(Loss) earnings per share data — Diluted:
                    
(Loss) income from continuing operations
 $(0.80) $1.67  $1.62  $1.77  $1.95 
(Loss) income from discontinued operations
  (0.03)  0.18   0.19   0.31   0.32 
Cumulative effect of adoption of a new accounting standard
  —   —   —   —   (0.03)
                     
Net (loss) income applicable to common shareholders
 $(0.83) $1.85  $1.81  $2.08  $2.24 
                     
Weighted average number of common shares
  119,987   121,497   109,613   109,142   99,024 
Cash dividends declared
 $2.07  $2.64  $2.36  $2.16  $1.94 
 

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  At December 31, 
  2008  2007  2006  2005  2004 
 
Balance Sheet Data:
                    
Real estate (at cost)
 $9,106,635  $8,984,671  $7,447,459  $7,029,337  $5,603,424 
Real estate, net of accumulated depreciation
  7,897,732   7,960,623   6,586,193   6,336,514   5,035,193 
Investments in and advances to joint ventures
  583,767   638,111   291,685   275,136   288,020 
Total assets
  9,018,325   9,089,816   7,179,753   6,862,977   5,583,547 
Total debt
  5,917,364   5,591,014   4,248,812   3,891,001   2,718,690 
Shareholders’ equity
  2,684,685   2,998,825   2,496,183   2,570,281   2,554,319 
 
                     
  For the Years Ended December 31, 
  2008 (1)  2007 (1)  2006 (1)  2005 (1)  2004 (1) 
 
Cash Flow Data:
                    
Cash flow provided by (used for):
                    
Operating activities
 $424,568  $414,616  $340,692  $355,423  $292,226 
Investing activities
  (464,341)  (1,148,316)  (203,047)  (339,443)  (1,134,601)
Financing activities
  22,698   755,491   (139,922)  (35,196)  880,553 
Other Data:
                    
Funds from operations (2):
                    
Net (loss) income applicable to common shareholders
 $(100,045) $225,113  $198,095  $227,474  $219,056 
Depreciation and amortization of real estate investments
  236,344   214,396   185,449   169,117   130,536 
Equity in net income from joint ventures
  (17,719)  (43,229)  (30,337)  (34,873)  (40,895)
Joint ventures’ funds from operations (2)
  68,355   84,423   44,473   49,302   46,209 
Minority interests (OP Units)
  1,145   2,275   2,116   2,916   2,607 
Gain on disposition of depreciable real estate investments, net
  (4,244)  (17,956)  (21,987)  (58,834)  (68,179)
Cumulative effect of adoption of a new accounting standard
  —   —   —   —   3,001 
                     
Funds from operations applicable to common shareholders (2)
  183,836   465,022   377,809   355,102   292,335 
Preferred share dividends
  42,269   50,934   55,169   55,169   50,706 
                     
  $226,105  $515,956  $432,978  $410,271  $343,041 
                     
Weighted average shares and OP Units (Diluted) (3)
  121,030   122,716   110,826   110,700   99,147 
 
 
(1)As described in the consolidated financial statements, the Company acquired 11 properties in 2008 (all of which were acquired through unconsolidated joint ventures), 317 properties in 2007 (including 68 of which were acquired through unconsolidated joint ventures), 20 properties in 2006 (including 15 of which were acquired through unconsolidated joint ventures and four of which the Company acquired through its joint venture partners’ interest), 52 properties in 2005 (including 36 of which were acquired through unconsolidated joint ventures and one of which the Company acquired through its joint venture partner’s interest), and 112 properties in 2004 (18 of which were acquired through unconsolidated joint ventures and one of which the Company acquired through its joint venture partner’s interest). The Company sold 22 properties in 2008 including the sale of a consolidated joint venture interest, 74 properties in 2007 (seven of which were

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owned through unconsolidated joint ventures), 15 properties in 2006 (nine of which were owned through unconsolidated joint ventures), 47 properties in 2005 (12 of which were owned through unconsolidated joint ventures), and 28 properties in 2004 (13 of which were owned through unconsolidated joint ventures). All amounts have been presented in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” In accordance with that standard, long-lived assets that were sold or classified as held for sale as a result of disposal activities have been classified as discontinued operations for all periods presented.
 
(2)Management believes that Funds From Operations (“FFO”), which is a non-GAAP financial measure, provides an additional and useful means to assess the financial performance of a Real Estate Investment Trust (“REIT.”) It is frequently used by securities analysts, investors and other interested parties to evaluate the performance of REITs, most of which present FFO along with net income as calculated in accordance with GAAP. FFO applicable to common shareholders is generally defined and calculated by the Company as net income, adjusted to exclude: (i) preferred share dividends, (ii) gains from disposition of depreciable real estate property, except for those sold through the Company’s merchant building program, which are presented net of taxes, (iii) extraordinary items and (iv) certain non-cash items. These non-cash items principally include real property depreciation, equity income from joint ventures and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures, determined on a consistent basis. Management believes that FFO provides the Company and investors with an important indicator of the Company’s operating performance. This measure of performance is used by the Company for several business purposes and for REITs it provides a recognized measure of performance other than GAAP net income, which may include non-cash items (often significant). Other real estate companies may calculate FFO in a different manner.
 
(3)Represents weighted average shares and operating partnership units, or OP Units, at the end of the respective period.
 
Item 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion should be read in conjunction with the consolidated financial statements, the notes thereto and the comparative summary of selected financial data appearing elsewhere in this report. Historical results and percentage relationships set forth in the consolidated financial statements, including trends that might appear, should not be taken as indicative of future operations. The Company considers portions of this information 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 expectations for future periods. Forward-looking statements include, without limitation, statements related to acquisitions (including any related pro forma financial information) and other business development activities, future capital expenditures, financing sources and availability and the effects of environmental and other regulations. Although the Company believes that the expectations reflected in those 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 statements of historical fact should be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates” and similar expressions are intended to identify forward-looking statements. Readers should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements and could materially affect the Company’s actual results, performance or achievements.
 
Factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:
 
  • The Company is subject to general risks affecting the real estate industry, including the need to enter into new leases or renew leases on favorable terms to generate rental revenues, and the current economic downturn may adversely affect the ability of the Company’s tenants, or new tenants, to enter into new leases or the ability of the Company’s existing tenants’ to renew their leases at rates at least as favorable as their current rates;
 
  • The Company could be adversely affected by changes in the local markets where its properties are located, as well as by adverse changes in national economic and market conditions;
 
  • The Company may fail to anticipate the effects on its properties of changes in consumer buying practices, including catalog sales and sales over the Internet and the resulting retailing practices and


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 space needs of its tenants or a general downturn in its tenants’ businesses, which may cause tenants to close stores;
 
  • The Company is subject to competition for tenants from other owners of retail properties, and its tenants are subject to competition from other retailers and methods of distribution. The Company is dependent upon the successful operations and financial condition of its tenants, in particular of its major tenants, and could be adversely affected by the bankruptcy of those tenants;
 
  • The Company relies on major tenants, which makes us vulnerable to changes in the business and financial condition of, or demand for our space, by such tenants;
 
  • The Company may not realize the intended benefits of acquisition or merger transactions. The acquired assets may not perform as well as the Company anticipated, or the Company may not successfully integrate the assets and realize the improvements in occupancy and operating results that the Company anticipates. The acquisition of certain assets may subject the Company to liabilities, including environmental liabilities;
 
  • The Company may fail to identify, acquire, construct or develop additional properties that produce a desired yield on invested capital, or may fail to effectively integrate acquisitions of properties or portfolios of properties. In addition, the Company may be limited in its acquisition opportunities due to competition, the inability to obtain financing on reasonable terms or any financing at all and other factors;
 
  • The Company may fail to dispose of properties on favorable terms. In addition, real estate investments can be illiquid, particularly as prospective buyers may experience increased costs of financing or difficulties obtaining financing, and could limit the Company’s ability to promptly make changes to its portfolio to respond to economic and other conditions;
 
  • The Company may abandon a development opportunity after expending resources if it determines that the development opportunity is not feasible due to a variety of factors, including a lack of availability of construction financing on reasonable terms, the impact of the current economic environment on prospective tenants’ ability to enter into new leases or pay contractual rent, or the inability by the Company to obtain all necessary zoning and other required governmental permits and authorizations;
 
  • The Company may not complete development projects on schedule as a result of various factors, many of which are beyond the Company’s control, such as weather, labor conditions, governmental approvals, material shortages or general economic downturn resulting in limited availability of capital, increased debt service expense and construction costs and decreases in revenue;
 
  • The Company’s financial condition may be affected by required debt service payments, the risk of default and restrictions on its ability to incur additional debt or enter into certain transactions under its credit facilities and other documents governing its debt obligations. In addition, the Company may encounter difficulties in obtaining permanent financing or refinancing existing debt. Borrowings under the Company’s revolving credit facilities are subject to certain representations and warranties and customary events of default, including any event that has had or could reasonably be expected to have a material adverse effect on the Company’s business or financial condition;
 
  • Changes in interest rates could adversely affect the market price of the Company’s common shares, as well as its performance and cash flow;
 
  • Debt and/orequity financing necessary for the Company to continue to grow and operate its business may not be available or may not be available on favorable terms or at all;
 
  • Recent disruptions in the financial markets could affect our ability to obtain financing on reasonable terms and have other adverse effects on us and the market price of our common shares;
 
  • The Company is subject to complex regulations related to its status as a real estate investment trust, or REIT, and would be adversely affected if it failed to qualify as a Real Estate Investment Trust (“REIT”);


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  • The Company must make distributions to shareholders to continue to qualify as a REIT, and if the Company must borrow funds to make distributions, those borrowings may not be available on favorable terms or at all;
 
  • Joint venture investments may involve risks not otherwise present for investments made solely by the Company, including the possibility that a partner or co-venturer may become bankrupt, may at any time have different interests or goals than those of the Company and may take action contrary to the Company’s instructions, requests, policies or objectives, including the Company’s policy with respect to maintaining its qualification as a REIT. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture. The partner could default on the loans outside of the Company’s control. Furthermore, if the current constrained credit conditions in the capital markets persist or deteriorate further, the Company could be required to reduce the carrying value of its equity method investments if a loss in the carrying value of the investment is other than a temporary decline pursuant to Accounting Principles Board (“APB”) No. 18, “The Equity Method of Accounting for Investments in Common Stock (“APB 18”)”;
 
  • The Company may not realize anticipated returns from its real estate assets outside the United States. The Company expects to continue to pursue international opportunities that may subject the Company to different or greater risks than those associated with its domestic operations. The Company owns assets in Puerto Rico, an interest in an unconsolidated joint venture that owns properties in Brazil and an interest in consolidated joint ventures that will develop and own properties in Canada, Russia and Ukraine;
 
  • International development and ownership activities carry risks that are different from those the Company faces with the Company’s domestic properties and operations. These risks include:
 
  • Adverse effects of changes in exchange rates for foreign currencies;
 
  • Changes in foreign political or economic environments;
 
  • Challenges of complying with a wide variety of foreign laws including tax laws and addressing different practices and customs relating to corporate governance, operations and litigation;
 
  • Different lending practices;
 
  • Cultural and consumer differences;
 
  • Changes in applicable laws and regulations in the United States that affect foreign operations;
 
  • Difficulties in managing international operations and
 
  • Obstacles to the repatriation of earnings and cash;
 
  • Although the Company’s international activities are currently a relatively small portion of its business, to the extent the Company expands its international activities, these risks could significantly increase and adversely affect its results of operations and financial condition;
 
  • The Company is subject to potential environmental liabilities;
 
  • The Company may incur losses that are uninsured or exceed policy coverage due to its liability for certain injuries to persons, property or the environment occurring on its properties and
 
  • The Company could incur additional expenses in order to comply with or respond to claims under the Americans with Disabilities Act or otherwise be adversely affected by changes in government regulations, including changes in environmental, zoning, tax and other regulations.
 
Executive Summary
 
The Company is a self-administered and self-managed REIT, in the business of acquiring, developing, redeveloping, owning, leasing and managing shopping centers. As of December 31, 2008, the Company’s portfolio consisted of 702 shopping centers and six business centers (including 329 properties owned through unconsolidated


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joint ventures and 40 properties owned through consolidated joint ventures). These properties consist of shopping centers, lifestyle centers and enclosed malls. At December 31, 2008, the Company ownedand/ormanaged approximately 149.5 million total square feet of Gross Leasable Area (“GLA”), which includes all of the aforementioned properties and one property owned by a third party. The Company also has assets under development in Canada and Russia. The Company believes that its portfolio of shopping center properties is one of the largest (measured by the amount of total GLA) currently held by any publicly-traded REIT. At December 31, 2008, the aggregate occupancy of the Company’s shopping center portfolio was 92.1%, as compared to 94.9% at December 31, 2007. The Company owned 702 shopping centers at December 31, 2008, as compared to 710 shopping centers at December 31, 2007. The average annualized base rent per occupied square foot was $12.33 at December 31, 2008, as compared to $12.24 at December 31, 2007. The decrease in the occupancy is a result of the deteriorating economic environment and increased tenant bankruptcies.
 
Current Strategy
 
The Company has taken important steps to address current and ongoing financial market dislocation, and will continue to do so. The Company seeks to lower leverage and improve liquidity. This will be achieved through asset sales, retained capital, the creation of joint ventures and fund structures, new equity and debt financings, including the proposed financing with Mr. Alexander Otto, and other means, with the aim of preserving capital and benefiting from the unique investment opportunities created by the challenging economic environment.
 
The Company’s portfolio and asset class have demonstrated limited volatility during prior economic downturns and continue to generate relatively consistent cash flows. The following unique set of core competencies is expected to continue to be utilized by the Company to maintain solid fundamentals:
 
  • Strong tenant relationships with the nation’s leading retailers, maintained through a national tenant account program;
 
  • The recent creation of an internal anchor store redevelopment department solely dedicated to aggressively identify opportunities towards releasing vacant anchor space created by recent bankruptcies and store closings;
 
  • Tenant credit underwriting team to measure tenant health and manage potential rent relief requests in the best interest of the property;
 
  • Diverse banking relationships to allow access to secured, unsecured, public and private capital;
 
  • An experienced funds management team dedicated to generating consistent returns for institutional partners;
 
  • A focused dispositions team which was recently expanded and dedicated to finding buyers for non-core assets;
 
  • Right-sized development and redevelopment departments equipped with disciplined standards for development and
 
  • An ancillary income department to creatively generate revenue at a low cost of investment and create cash flow streams from empty or underutilized space.
 
Balance Sheet and Capital Activities
 
The Company took the following proactive steps in 2008 to reduce leverage and enhance financial flexibility:
 
  • Eliminated the common dividend for the fourth quarter of 2008 and reduced the 2009 common dividend to the minimum required to maintain REIT status;
 
  • Sold assets in 2008 that generated $136 million in net proceeds to the Company
 
  • Maintained a significant pool of unencumbered assets;


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  • Raised net proceeds of $43 million through the sale of common stock via the Company’s continuous equity program;
 
  • Purchased a portion of the Company’s outstanding senior unsecured notes at a discount to par and
 
  • Raised new debt proceeds of $1.2 billion.
 
Despite current market conditions, asset sales are still occurring, new debt is still available and mortgages are being extended or re-financed at acceptable terms. In January, the Company repaid the remaining outstanding unsecured notes that had an original par value of $275 million and matured January 30, 2009. The Company believes it is well-equipped to address all near-term debt maturities.
 
Retail Environment
 
The retail market in the United States weakened in 2008 and continues to be challenged in early 2009. Consumer spending has declined in response to erosion in housing values and stock market investments, more stringent lending practices and job losses. Retail sales have declined and tenants have become more selective in new store openings. Some retailers have closed existing locations and, as a result, the Company has experienced a loss in occupancy. In addition, the bankruptcies of Linens ’N Things, Circuit City Goody’s, Steve & Barry’s and Mervyns led to store closings that created additional vacancy.
 
While the retail environment has been generally troubled, many tenants remain relatively healthy. Those that specialize in low-cost necessity goods and services are taking market share from high-end discretionary retailers that dominate the mall portfolios. The Company’s largest tenants, including Wal-Mart, Sam’s Club, Target, and Kohl’s, appeal to value-oriented consumers, remain well-capitalized, and have outperformed other retail categories on a relative basis.
 
The following table lists the Company’s 10 largest tenants based on total annualized rental revenues and Company-owned GLA of the wholly-owned properties and the Company’s proportionate share of unconsolidated joint venture properties combined as of December 31, 2008:
 
             
  % of Total
    
  Shopping Center
  % of Company-Owned
 
Tenant
 Base Rental Revenues  Shopping Center GLA 
 
 1.  Wal-Mart/Sam’s Club  4.3%  7.3%
 2.  T.J. Maxx/Marshalls/A.J. Wright/Homegoods  2.1   2.4 
 3.  Mervyns(1)  1.9   1.7 
 4.  Lowe’s Home Improvement  1.9   3.2 
 5.  PetSmart  1.9   1.5 
 6.  Bed Bath & Beyond  1.6   1.4 
 7.  Circuit City(1)  1.6   1.1 
 8.  Kohl’s  1.4   2.0 
 9.  Michaels  1.4   1.3 
 10.  Rite Aid Corporation  1.4   0.7 
 
 
(1)Leases terminated effective for 2009.


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The following table lists the Company’s largest tenants based on total annualized rental revenues and Company-owned GLA of the wholly-owned properties and the Company’s unconsolidated joint venture properties as of December 31, 2008:
 
                 
  Wholly-Owned Properties Joint Venture Properties
  % of
 % of
 % of
 % of
  Shopping Center
 Company-Owned
 Shopping Center
 Company-Owned
  Base Rental
 Shopping Center
 Base Rental
 Shopping Center
Tenant
 Revenues GLA Revenues GLA
 
Wal-Mart/Sam’s Club
  5.1%  8.6%  1.9%  3.2%
Lowe’s Home Improvement
  2.3   3.8   0.7   1.0 
T.J. Maxx/Marshalls/A.J. Wright/Homegoods
  2.0   2.4   2.7   3.2 
PetSmart
  1.8   1.4   2.5   2.3 
Circuit City (1)
  1.8   1.2   1.3   1.1 
Rite Aid Corporation
  1.7   0.9   0.1   0.1 
Bed Bath & Beyond
  1.7   1.4   1.7   1.7 
GAP Stores
  1.3   0.9   1.2   1.1 
Ahold USA
  1.3   1.1   1.5   1.6 
Michaels
  1.3   1.2   1.6   1.7 
Dick’s Clothing and Sporting Goods
  1.2   1.2   1.6   1.5 
Kohl’s
  1.2   1.8   2.1   3.5 
Ross Dress For Less
  0.9   0.9   1.7   1.8 
Publix Supermarkets
  0.4   0.6   2.6   3.5 
Mervyns (1)
  0.2   0.2   3.5   3.5 
 
 
(1)Lease terminated effective for 2009
 
Retail sales have been trending toward discount retailers for over a decade, and the Company expects that trend to continue.
 
(LINE GRAPH)


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Company Fundamentals
 
The Company has shown relatively consistent occupancy historically. The Occupancy declined in the fourth quarter of 2008 and the Company expects a continuation of that trend into 2009 until the economic environment improves. However, with year-end occupancy at 92.1%, the portfolio overall occupancy remains healthy.
 
(GRAPH)


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Notwithstanding the recent decline in occupancy, the Company continues to sign a large number of new leases, with overall leasing spreads that continue to trend positively, consistent with historical experience and practice for new leases and renewals have historically.
 
(GRAPH)
 
Long-term performance shows consistently strong rent growth and occupancy stability throughout multiple economic cycles.
 
(GRAPH)


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The Company’s value-oriented shopping center format is ideal for keeping maintenance costs and capital expenditures low, while still maintaining an attractive, high quality retail environment. The Company believes its capital expenditures as a percentage of net operating income are among the lowest in its industry. Low capital expenditures contribute to a strong organic growth rate and a more accurate measure of same store net operating income growth, which was 1.7% for the year ended December 31, 2008.
 
Through February 13, 2009, the Company and its joint venture investments sold assets for gross proceeds aggregating $65.8 million in 2009 which was used to repay debt. In 2008, the Company sold 22 assets for gross proceeds aggregating $132.5 million. As part of its ongoing portfolio optimization and capital recycling strategies to improve overall portfolio performance and operating efficiency, the Company expects to continue to sell assets that are not consistent with its long-term investment objectives. Although the Company does not have any binding commitments and the market conditions require more structuring and opportunistic pricing, the Company’s intention is to continue its historical strategy of selling certain core assets with stable cash flows to joint ventures with institutional partners, which will provide both liquidity and a future stream of fee income. Proceeds from these sales will generally be used to purchase the Company’s debt at possible discounts to parand/or to reduce credit facility balances.
 
Year in Review — 2008
 
For the year ended December 31, 2008, the Company recorded a loss of approximately $57.8 million, or $0.83 per share (diluted), compared to net income of $276.0 million, or $1.85 per share (diluted), for the prior year. Funds From Operations (“FFO”) applicable to common shareholders for the year ended December 31, 2008, was $183.8 million compared to $465.0 million for the year ended December 31, 2007. The decreases in net income and FFO applicable to common shareholders for the year ended December 31, 2008, of approximately $325.2 million and $281.2 million, respectively, are primarily the result of non-cash impairment charges recorded relating to the Company’s consolidated real estate assets as well as its unconsolidated joint venture investments aggregating $169.2 million, net of amounts applicable to minority interests; a non-cash charge of $15.8 million related to the termination of an equity award plan; and costs incurred of $28.3 million related to abandoned projects, transaction costs and other expenses partially offset by a gain on the repurchase of the Company’s senior notes of $11.6 million. In addition, the Company recognized a reduced amount of transactional income in 2008, primarily related to gains on disposition of real estate that occurred in 2007, as the Company transferred 62 assets to unconsolidated joint venture interests and sold 67 assets to third parties in 2007.
 
Given the dramatic changes in the capital markets over the past year that have affected most companies, and real estate companies in particular, the Company has implemented changes to its business model that the company believes will result in the Company operating with an increased focus on improving liquidity and lowering leverage. This strategy should assist the Company in remaining stable through these difficult times and emerge as a stronger company. These initiatives were established in the third quarter of 2008 and represent a top priority for the executive management team. The Company is firmly committed to lowering leverage and improving liquidity.
 
The Company has addressed the current dividend policy, controlled development expenditures, developed a list of non-core assets for sale, and purchasednear-termdebt maturities at a discount. The unsecured notes due in January 2009 were repaid at maturity. Most importantly, there are not any unsecured debt maturities until May 2010. Because the next significant maturity is more than one year from February 2009, the date of this annual report, the Company intends to use this time to conserve capital and use proceeds from non-core asset sales and obtain new equity and debt proceeds.
 
The Company had several key achievements in 2008, including an important part of the Company’s strategy of selling non-core assets. In 2008, these transactions generated gross proceeds of almost $200 million for its wholly-owned and joint venture assets, of which the Company’s proportionate share aggregated $136.1 million and allowed the Company to improve its portfolio quality. The Company entered into a continuous equity program that provided for approximately $200 million equity issuance proceeds. In December 2008, the Company sold 8.6 million of its common shares for net proceeds of approximately $43.0 million at a weighted-average share price of approximately $5.00 per share. These proceeds were used to repay revolving credit facility borrowings and buy unsecured notes at a discount to par. Although these issuances represents a high cost of equity capital and is dilutive to certain metrics, this capital raise demonstrates the Company’s commitment to enhancing its balance sheet. Additionally, the Company and its unconsolidated joint venture partners raised approximately $1.2 billion of new mortgage capital in 2008 and the Company purchased approximately $66.9 million of its unsecured notes at a discount to par.


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The Company continues to address its consolidated debt maturities and is working with lenders to extend or refinance maturities for the remainder of 2009.
 
The Company elected not to declare a dividend for the fourth quarter of 2008 as the Company had distributed enough income from the first three quarters to maintain its REIT status and part of the Company’s overal strategy of preserving capital. Consistent with this strategy, the Company intends to set the 2009 annual dividend at or near the minimum distribution required to maintain REIT status.
 
On February 23, 2009, the Company entered into a stock purchase agreement with Mr. Alexander Otto (the “Investor”) to issue and sell 30 million common shares and warrants to purchase up to 10 million common shares with an exercise price of $6.00 per share (the “Warrants”) to the Investor and certain members of his family (collectively with the Investor, the “Otto Family”) for aggregate gross proceeds of approximately $112.5 million. The transaction, if approved and consummated and will occur in two closings, each consisting of 15 million common shares and a warrant to purchase five million common shares, provided that the Investor also has the right to purchase all of the common shares and warrants at one closing. The first closing will occur upon the satisfaction or waiver of certain closing conditions, including the approval by the Company’s shareholders of the issuance of the Company’s securities, and the second closing will occur within six months of the shareholder approval.
 
The Company expects that 2009 will be a challenging year, but believes that management is prepared to meet these challenges. The Company is prudently evaluating all sources and uses of cash to improve liquidity and lower leverage, operating under conservative assumptions to ensure that the Company should be able to address all of its near-term needs, even in the event of a continued financial market dislocation.
 
CRITICAL ACCOUNTING POLICIES
 
The consolidated financial statements of the Company include the accounts of the Company and all subsidiaries where the Company has financial or operating control. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related notes. In preparing these financial statements, management has utilized available information, including the Company’s history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments of certain amounts included in the consolidated financial statements, giving due consideration to materiality. It is possible that the ultimate outcome as anticipated by management in formulating its estimates inherent in these financial statements might not materialize. Application of the critical accounting policies described below involves the exercise of judgment and the use of assumptions as to future uncertainties. As a result, actual results could differ from these estimates. In addition, other companies may utilize different estimates that may affect the comparability of the Company’s results of operations to those of companies in similar businesses.
 
Revenue Recognition and Accounts Receivable
 
Rental revenue is recognized on a straight-line basis that averages minimum rents over the current term of the leases. Certain of these leases provide for percentage and overage rents based upon the level of sales achieved by the tenant. Percentage and overage rents are recognized after a tenant’s reported sales have exceeded the applicable sales break point set forth in the applicable lease. The leases also typically provide for tenant reimbursements of common area maintenance and other operating expenses and real estate taxes. Accordingly, revenues associated with tenant reimbursements are recognized in the period in which the expenses are incurred based upon the tenant lease provision. Management fees are recorded in the period earned. Ancillary and other property-related income, which includes the leasing of vacant space to temporary tenants, are recognized in the period earned. Lease termination fees are included in other revenue and recognized and earned upon termination of a tenant’s lease and relinquishment of space in which the Company has no further obligation to the tenant. Acquisition and financing fees are earned and recognized at the completion of the respective transaction in accordance with the underlying agreements. Fee income derived from the Company’s unconsolidated joint venture investments is recognized to the extent attributable to the unaffiliated ownership interest.


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The Company makes estimates of the collectibility of its accounts receivable related to base rents, including straight-line rentals, expense reimbursements and other revenue or income. The Company specifically analyzes accounts receivable and analyzes historical bad debts, customer credit worthiness, current economic trends and changes in customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, the Company makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectibility of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. These estimates have a direct impact on the Company’s net income because a higher bad debt reserve results in less net income.
 
Notes Receivables
 
Notes receivables include certain loans issued relating to real estate investment. Loan receivables are recorded at stated principal amounts. The Company defers certain loan origination and commitment fees, net of certain origination costs and amortizes them over the term of the related loan. The Company evaluates the collectibility of both interest and principal on each loan to determine whether it is impaired. A loan is considered to be impaired when, based upon current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. When a loan is considered to be impaired, the amount of loan loss reserve is calculated by comparing the recorded investment to the value of the underlying collateral. The Company is required to make subjective assessments as to whether there are impairments in the value of collateral. These assessments have a direct impact on the Company’s net income because recording a reserve results in an immediate negative adjustment to net income. Interest income on performing loans is accrued as earned. Interest income on non-performing loans is recognized on a cost-recovery basis.
 
As of December 31, 2008, the Company had seven loans with total commitments of up to $77.7 million, of which approximately $62.7 million had been funded.
 
Real Estate
 
Land, buildings and fixtures and tenant improvements are recorded at cost and stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovationsand/orreplacements that improve or extend the life of the asset are capitalized and depreciated over their estimated useful lives.
 
Properties are depreciated using the straight-line method over the estimated useful lives of the assets. The Company is required to make subjective assessments as to the useful lives of its properties for purposes of determining the amount of depreciation to reflect on an annual basis with respect to those properties. These assessments have a direct impact on the Company’s net income. If the Company would lengthen the expected useful life of a particular asset, it would be depreciated over more years and result in less depreciation expense and higher annual net income.
 
Assessment of recoverability by the Company of certain other lease-related costs must be made when the Company has a reason to believe that the tenant may not be able to perform under the terms of the lease as originally expected. This requires management to make estimates as to the recoverability of such assets.
 
Gains from disposition of outlots, land parcels and shopping centers are generally recognized using the full accrual or partial sale method (as applicable) in accordance with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 66, “Accounting for Real Estate Sales,” provided that various criteria relating to the terms of the sale and any subsequent involvement by the Company with the properties sold are met.
 
Long-LivedAssets
 
On a periodic basis, management assesses whether there are any indicators that the value of real estate properties may be impaired. A property’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. In management’s estimate of cash flows, it considers factors such as expected future operating income, trends and prospects, the effects of demand, competition and other factors. In addition, the undiscounted


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cash flows may consider a probability-weighted cash flow estimation approach when alternative courses of action to recover the carrying amount of a long-lived asset are under consideration or a range is estimated. The determination of undiscounted cash flows requires significant estimates by management and considers the expected course of action at the balance sheet date. Subsequent changes in estimated undiscounted cash flows arising from changes in anticipated actions could affect the determination of whether an impairment exists and whether the effects could have a material impact on the Company’s net income. To the extent an impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the fair value of the property.
 
The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties and other investments. These assessments have a direct impact on the Company’s net income because recording an impairment charge results in an immediate negative adjustment to net income.
 
The fair value of real estate investments utilized in the Company’s impairment calculations are estimated based on the price that would be received to sell an asset in an orderly transaction between marketplace participants at the measurement date. Investments without a public market are valued based on assumptions made and valuation techniques used by the Company. The decline in liquidity and prices of real estate and real estate related investments, as well as the availability of observable transaction data and inputs, may have made it more difficult to determine the fair value of such investments. As a result, amounts ultimately realized by the Company from investments sold may differ from the fair values presented, and the differences could be material.
 
When assets are identified by management as held for sale, the Company discontinues depreciating the assets and estimates the sales price, net of selling costs of such assets. If, in management’s opinion, the net sales price of the assets that have been identified for sale is less than the net book value of the assets, an impairment charge is recorded.
 
The Company allocates the purchase price to assets acquired and liabilities assumed on a gross basis based on their relative fair values at the date of acquisition pursuant to the provisions of SFAS No. 141, “Business Combinations.” In estimating the fair value of the tangible and intangible assets and liabilities acquired, the Company considers information obtained about each property as a result of its due diligence, marketing and leasing activities. It applies various valuation methods, such as estimated cash flow projections utilizing appropriate discount and capitalization rates, estimates of replacement costs net of depreciation and available market information. The Company is required to make subjective estimates in connection with these valuations and allocations. These intangible assets are reviewed as part of the overall carrying basis of an asset for impairment.
 
Off-BalanceSheet Arrangements
 
The Company has a number ofoff-balancesheet joint ventures and other unconsolidated arrangements with varying structures. The Company consolidates entities in which it owns less than a 100% equity interest if it is deemed to have a controlling interest or is the primary beneficiary in a variable interest entity, as defined in Financial Interpretation (“FIN”) No. 46, “Consolidation of Variable Interest Entities” (“FIN 46(R)”); or is the controlling general partner pursuant to Emerging Issue Task Force (“EITF”) No.04-05.
 
To the extent that the Company contributes assets to a joint venture, the Company’s investment in the joint venture is recorded at the Company’s cost basis in the assets that were contributed to the joint venture. To the extent that the Company’s cost basis is different from the basis reflected at the joint venture level, the basis difference is amortized over the life of the related asset and included in the Company’s share of equity in net income of joint ventures. In accordance with the provisions of Statement of Position78-9,“Accounting for Investments in Real Estate Ventures,” the Company will recognize gains on the contribution of real estate to joint ventures, relating solely to the outside partner’s interest, to the extent the economic substance of the transaction is a sale.
 
On a periodic basis, management assesses whether there are any indicators that the value of the Company’s investments in unconsolidated joint ventures may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment and such difference is deemed to be other than temporary. To the extent an impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over the estimated fair value of the investment.


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Measurement of Fair Value
 
The Company adopted the provisions of SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), relating to its financial assets and financial liabilities on January 1, 2008. Due to the continued deterioration of the U.S. capital market, the lack of liquidity and the related impact on the real estate market and retail industry, the Company determined that several of its unconsolidated joint venture investments suffered an “other than temporary impairment” in December 2008. As a result, the Company was required to assess several investments for impairment in accordance with APB 18. The estimated fair value of each joint venture investment was determined pursuant to the provisions of SFAS 157 since investments in unconsolidated joint ventures are considered financial assets subject to the provisions of this standard. The valuation of these assets was determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each asset as well as the income capitalization approach considering prevailing market capitalization rates. The Company reviews each investment based on the highest and best use of the investment and market participation assumptions. For joint ventures with investments in projects under development, the significant assumptions included the discount rate, the timing for the construction completion and project stabilization and the exit capitalization rate. For joint ventures with investments in operational real estate assets, the significant assumptions included the capitalization rate used in the income capitalization valuation, as well as projected property net operating income and the valuation of joint venture debt pursuant to SFAS 157.
 
These valuation adjustments were calculated based on market conditions and assumptions made by management at the time the valuation adjustments were recorded, which may differ materially from actual results if market conditions or the assumptions change.
 
Discontinued Operations
 
Pursuant to the definition of a component of an entity as described in SFAS No. 144, “Accounting for the Impairment or Disposal ofLong-LivedAssets” (“SFAS 144”) assuming no significant continuing involvement, the sale of a property is considered a discontinued operation. In addition, the operations from properties classified as held for sale are considered a discontinued operation. The Company generally considers assets to be held for sale when the transaction has been approved by the appropriate level of management and there are no known significant contingencies relating to the sale such that the sale of the property within one year is considered probable. Accordingly, the results of operations of operating properties disposed of or classified as held for sale, for which the Company has no significant continuing involvement, are reflected as discontinued operations. On occasion, the Company will receive unsolicited offers from third parties to buy an individual shopping center. The Company generally will classify properties as held for sale when a sales contract is executed with no contingencies and the prospective buyer has significant funds at risk to ensure performance.
 
Interest expense, which is specifically identifiable to the property, is used in the computation of interest expense attributable to discontinued operations. Consolidated interest at the corporate level is allocated to discontinued operations pursuant to the methods prescribed under EITFNo. 87-24,“Allocation of Interest to Discontinued Operations,” based on the proportion of net assets sold.
 
Included in discontinued operations as of and for the three years ended December 31, 2008, are 95 properties aggregating 8.4 million square feet of GLA. The operations of such properties have been reflected on a comparative basis as discontinued operations in the consolidated financial statements for each of the three years ended December 31, 2008, included herein.
 
Stock-Based Employee Compensation
 
The Company accounts for its stock-based compensation in accordance with SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”). SFAS 123(R) requires all share-based payments to employees, including grants of stock options, to be recognized in the financial statements based on their fair value. The fair value is estimated at the date of grant using a Black-Scholes option pricing model with weighted average assumptions for the activity under stock plans. Option pricing model input assumptions, such as expected volatility, expected term and risk-free interest rate, impact the fair value estimate. Further, the forfeiture rate impacts the amount of aggregate compensation. These assumptions are subjective and generally require significant analysis and judgment to develop.


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When estimating fair value, some of the assumptions will be based on or determined from external data, and other assumptions may be derived from experience with share-based payment arrangements. The appropriate weight to place on experience is a matter of judgment, based on relevant facts and circumstances.
 
The risk-free interest rate is based upon a U.S. Treasury Strip with a maturity date that approximates the expected term of the option. The expected life of an award is derived by referring to actual exercise experience. The expected volatility of stock is derived by referring to changes in the Company’s historical share prices over a time frame similar to the expected life of the award.
 
Accrued Liabilities
 
The Company makes certain estimates for accrued liabilities including accrued professional fees, interest, real estate taxes, insurance and litigation reserves. These estimates are subjective and based on historical payments, executed agreements, anticipated trends and representations from service providers. These estimates are prepared based on information available at each balance sheet date and are reevaluated upon the receipt of any additional information. Many of these estimates are for payments that occur in one year. These estimates have a direct impact on the Company’s net income because a higher accrual will result in less net income.
 
The Company has made estimates in assessing the impact of FIN No. 48, “Accounting for Uncertainty in Income Taxes — An Interpretation of FAS No. 109” (“FIN 48”). The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company makes certain estimates in the determination on the use of valuation reserves recorded for deferred tax assets. These estimates could have a direct impact on the Company’s earnings, as a difference in the tax provision could alter the Company’s net income.
 
Comparison of 2008 to 2007 Results of Operations
Continuing Operations
 
Revenues from Operations (in thousands)
 
                 
  2008  2007  $ Change  % Change 
 
Base and percentage rental revenues
 $638,078  $645,955  $(7,877)  (1.2)%
Recoveries from tenants
  198,919   203,126   (4,207)  (2.1)
Ancillary and other property income
  22,294   19,518   2,776   14.2 
Management, development and other fee income
  62,890   50,840   12,050   23.7 
Other
  9,291   13,697   (4,406)  (32.2)
                 
Total revenues
 $931,472  $933,136  $(1,664)  (0.2)%
                 
 
In the aggregate, base and percentage rental revenues for the Company in 2008 as compared to 2007 decreased by approximately $7.9 million. However, base and percentage rental revenues relating to new leasing, re-tenanting and expansion of the Core Portfolio Properties (shopping center properties owned as of January 1, 2007, and since March 1, 2007, with regard to Inland Retail Real Estate Trust, Inc. (“IRRETI”) assets, but excluding properties under development/redevelopment and those classified as discontinued operations) (“Core Portfolio Properties”),


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increased approximately $3.3 million, or 0.6%, for the year ended December 31, 2008, as compared to the same period in 2007. The decrease in overall base and percentage rental revenues is due to the following (in millions):
 
     
  Increase
 
  (Decrease) 
 
Core Portfolio Properties
 $3.3 
IRRETI merger and acquisition of real estate assets
  17.8 
Development/redevelopment of shopping center properties
  3.8 
Disposition of shopping center properties in 2007
  (29.0)
Business center properties
  0.4 
Straight-line rents(1)
  (4.2)
     
  $(7.9)
     
 
 
(1)Straight-line rental revenue decreased $4.2 million, or 36.3%, for the year ended December 31, 2008, as compared to the same period in 2007. This decrease was due in part to a decrease in straight-line rent recognized on the Mervyns portfolio in the fourth quarter of 2008.
 
At December 31, 2008, the aggregate occupancy of the Company’s shopping center portfolio was 92.1%, as compared to 94.9% at December 31, 2007. The Company owned 702 shopping centers at December 31, 2008, as compared to 710 shopping centers at December 31, 2007. The average annualized base rent per occupied square foot was $12.33 at December 31, 2008, as compared to $12.24 at December 31, 2007. The decrease in the occupancy is primarily a result of the deteriorating economic environment and increased tenant bankruptcies.
 
At December 31, 2008, the aggregate occupancy of the Company’s wholly-owned shopping centers was 90.7%, as compared to 93.9% at December 31, 2007. The Company owned 333 wholly-owned shopping centers at December 31, 2008, as compared to 353 shopping centers at December 31, 2007. The average annualized base rent per leased square foot was $11.74 at December 31, 2008, as compared to $11.53 at December 31, 2007. The decrease in the occupancy is primarily a result of the deteriorating economic environment and increased tenant bankruptcies.
 
At December 31, 2008, the aggregate occupancy rate of the Company’s joint venture shopping centers was 93.4%, as compared to 95.9% at December 31, 2007. The Company’s joint ventures owned 369 shopping centers including 40 consolidated centers primarily owned through DDR MDT MV LLC (“MV LLC”) at December 31, 2008, as compared to 357 shopping centers including 40 consolidated centers at December 31, 2007. The average annualized base rent per leased square foot was $12.85 at December 31, 2008, as compared to $12.86 at December 31, 2007. The decrease in the occupancy is primarily a result of the deteriorating economic environment and increased tenant bankruptcies.
 
At December 31, 2008, the aggregate occupancy of the Company’s business centers was 72.4%, as compared to 70.0% at December 31, 2007. The business centers consist of six assets in four states at December 31, 2008. The business centers consisted of seven assets in five states at December 31, 2007.
 
Recoveries from tenants decreased $4.2 million, or 2.1%, for the year ended December 31, 2008, as compared to the same period in 2007. This decrease is primarily due to the transfer of assets to joint ventures in 2007. Recoveries decreased in the aggregate despite an increase in operating and maintenance expenses, due in part to the significant increase in bad debt expense discussed below. Recoveries were approximately 77.4% and 85.1% of operating expenses and real estate taxes including bad debt expense for the years ended December 31, 2008 and 2007, respectively.


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The decrease in recoveries from tenants was primarily related to the following (in millions):
 
     
  Increase
 
  (Decrease) 
 
IRRETI merger and acquisition of real estate assets
 $5.5 
Development/redevelopment of shopping center properties in 2008 and 2007
  2.6 
Transfer of assets to unconsolidated joint ventures in 2007
  (10.7)
Net increase in operating expenses at the remaining shopping center and business center properties
  (1.6)
     
  $(4.2)
     
 
Ancillary and other property income is a result of pursuing additional revenue opportunities in the Core Portfolio Properties. The increase in ancillary and other property income is offset by the conversion of operating arrangements at one of the Company’s shopping centers into a long-term lease agreement. This conversion resulted in a decrease in ancillary and other property income of $4.5 million and a corresponding increase in base rent. Ancillary revenue opportunities have in the past included short-term and seasonal leasing programs, outdoor advertising programs, wireless tower development programs, energy management programs, sponsorship programs and various other programs.
 
The increase in management, development and other fee income for the year ended December 31, 2008, is primarily due to the following (in millions):
 
     
  Increase
 
  (Decrease) 
 
Newly formed unconsolidated joint venture interests
 $7.0 
Development fee income
  (1.3)
Other income
  2.7 
Sale of several of the Company’s unconsolidated joint venture properties
  (0.4)
Leasing commissions
  3.6 
Decrease in management fee income at various unconsolidated joint ventures
  0.5 
     
  $12.1 
     
 
Development fee income was primarily earned through the redevelopment of joint venture assets that are owned through the Company’s investments with the Coventry II Fund discussed below. In light of current market conditions, development fees may decline if development or redevelopment projects are delayed.
 
Other revenue is composed of the following (in millions):
 
         
  Year Ended
 
  December 31, 
  2008  2007 
 
Lease terminations and bankruptcy settlements
 $6.3  $5.0 
Acquisition and financing fees (1)
  2.0   7.9 
Other
  1.0   0.8 
         
  $9.3  $13.7 
         
 
 
(1)Includes acquisition fees of $6.3 million earned from the formation of the DDRTC Core Retail Fund LLC in February 2007, excluding the Company’s retained ownership interest. The Company’s fee was earned in conjunction with services rendered by the Company in connection with the acquisition of the IRRETI real estate assets. Financing fees are earned in connection with the formation and refinancing of unconsolidated joint ventures, excluding the Company’s retained ownership interest. The Company’s fees are earned in conjunction with the closing and are based upon amount of the financing transaction by the joint venture.


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Expenses from Operations (in thousands)
 
                 
  2008  2007  $ Change  % Change 
 
Operating and maintenance
 $146,346  $131,409  $14,937   11.4%
Real estate taxes
  110,773   107,428   3,345   3.1 
Impairment charge
  79,864   —   79,864   100.0 
General and administrative
  97,719   81,244   16,475   20.3 
Depreciation and amortization
  242,032   214,445   27,587   12.9 
                 
  $676,734  $534,526  $142,208   26.6%
                 
 
Operating and maintenance expenses include the Company’s provision for bad debt expense, which approximated 2.0% and 0.9% of total revenues for the years ended December 31, 2008 and 2007, respectively. In 2008, bad debt expense included the write off of $6.6 million of straight-line rents of which $5.5 million primarily relates to leases entered into with Mervyns, of which 50% is allocable to minority interest and $1.1 million relates to major tenant banckruptcies (see Economic Conditions).
 
The increase in rental operation expenses, excluding general and administrative, is due to the following (in millions):
 
             
  Operating
       
  and
  Real Estate
    
  Maintenance  Taxes  Depreciation 
 
Core Portfolio Properties
 $5.9  $2.2  $10.8 
IRRETI merger
  2.9   3.5   10.5 
Acquisition and development/redevelopment of shopping center properties
  2.3   2.4   6.1 
Transfer of assets to unconsolidated joint ventures in 2007
  (6.6)  (4.8)  (1.3)
Business center properties
  0.1   —   0.2 
Provision for bad debt expense
  10.3   —   — 
Personal property
  —   —   1.3 
             
  $14.9  $3.3  $27.6 
             
 
In December 2008, due to the continued deterioration of the U.S. capital markets, the lack of liquidity and the related impact on the real estate market and retail industry, that accelerated during the fourth quarter of 2008, the Company recorded impairment charges on several consolidated real estate investments, including both operating shopping centers and land under development, to the extent that the book basis of the asset was in excess of the estimated fair market value. A portion of these charges are allocable to minority interest thereby providing a partial offset. As a result, the Company recorded impairment charges of $79.9 million on several consolidated real estate investments determined pursuant to the provisions of SFAS 144.
 
General and administrative expenses included increased expenses primarily attributable to the merger with IRRETI and additional stock-based compensation expense. Total general and administrative expenses were approximately 5.2% and 4.5% of total revenues, including total revenues of unconsolidated joint ventures, for the years ended December 31, 2008 and 2007, respectively. In December 2008, an equity award plan was terminated because it was determined that the program no longer provided any motivational or retention value, and therefore would not help achieve the goals for which it was created. In connection with the award termination, as the Compensation Committee of the Board of Directors and the participants agreed to cancel the awards for no consideration and the termination was not accompanied by a concurrent grant of (or offer to grant) replacement awards or other valuable consideration, the Company recorded a non-cash charge of approximately $15.8 million of previously unrecognized compensation cost associated with these awards.
 
If the transaction discussed in 2009 Activity — Current Strategies is approved by the Company’s shareholders and there is a beneficial owner of 20% or more of the Company’s outstanding common shares as a result thereof, a


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“change in control” will be deemed to have occurred under substantially all of the Company’s equity award plans. It is expected that, in accordance with the equity award plans, all unvested stock options would become fully exercisable and all restrictions on unvested restricted shares would lapse. As such, the Company could record an accelerated non-cash charge in accordance with SFAS 123(R) of approximately $15 million related to these equity awards, of which approximately $10 million would have been expensed in periods following 2009.
 
The Company continues to expense internal leasing salaries, legal salaries and related expenses associated with certain leasing and re-leasing of existing space. The Company will cease the capitalization of these items as assets are placed in service or upon the temporary suspension of construction. Because the Company has suspended certain construction activities, the amount of capitalized costs may be reduced. In addition, the Company capitalized certain direct and incremental internal construction and software development and implementation costs consisting of direct wages and benefits, travel expenses and office overhead costs of $14.6 million and $12.8 million in 2008 and 2007, respectively. In connection with the anticipated reduced level of development spending, the Company has taken steps to reduce overhead cost in this area.
 
Other Income and Expenses (in thousands)
 
                 
  2008  2007  $ Change  % Change 
 
Interest income
 $5,473  $8,772  $(3,299)  (37.6)%
Interest expense
  (244,212)  (258,149)  13,937   (5.4)
Gain on repurchase of senior notes
  11,552   —   11,552   100.0 
Abandoned projects and transactions costs
  (12,433)  —   (12,433)  100.0 
Other expense, net
  (15,819)  (3,019)  (12,800)  424.0 
                 
  $(255,439) $(252,396) $(3,043)  1.2%
                 
 
Interest income for the year ended December 31, 2008, decreased primarily due to excess cash held by the Company immediately following the closing of the IRRETI merger in February 2007.
 
Interest expense decreased primarily due to the sale of approximately $1.4 billion of assets in the second and third quarters of 2007. In addition, interest expense was lower due to a decrease in short-term interest rates in 2008 yet offset by additional interest expense as development assets became operational. The weighted-average debt outstanding and related weighted-average interest rates are as follows:
 
         
  Year Ended,
 
  December 31, 
  2008  2007 
 
Weighted-average debt outstanding (billions)
 $5.8  $5.4 
Weighted-average interest rate
  4.7%  5.4%
 
         
  At December 31, 
  2008  2007 
 
Weighted-average interest rate
  4.2%  5.2%
 
The reduction in weighted-average interest rates in 2008 is primarily related to the decline in short-term interest rates. Interest costs capitalized in conjunction with development and expansion projects and unconsolidated development joint venture interests were $39.2 million for the year ended December 31, 2008, compared to $26.9 million for the same period in 2007. The Company will cease the capitalization of interest as assets are placed in service or upon the temporary suspension of construction. Because the Company has suspended certain construction activities, the amount of capitalized interest may be reduced in future periods.
 
Gain on the repurchase of senior notes relates to the Company’s purchase of approximately $70.3 million face amount of its outstanding senior notes at a discount to par during 2008, resulting in a gain of approximately $11.6 million. During January 2009, the Company purchased an additional $10 million of senior notes at a discount to par.


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Abandoned projects and transactions costs primarily relate to the write-off costs associated with abandoned development projects as well as costs incurred for transactions that are no longer expected to close.
 
Other expense primarily relates to a $5.4 million loan loss reserve associated with a note receivable as well as litigation costs related to a potential liability associated with a legal verdict.
 
Other (in thousands)
 
                 
  2008  2007  $ Change  % Change 
 
Equity in net income of joint ventures
 $17,719  $43,229  $(25,510)  (59.0)%
Impairment of join venture investments
  (106,957)  —   (106,957)  100.0 
Minority interests
  11,188   (18,218)  29,406   (161.4)
Income tax benefit of taxable REIT subsidiaries and franchise taxes
  17,434   14,669   2,765   18.8 
 
A summary of the decrease in equity in net income of joint ventures for the year ended December 31, 2008, is composed of the following (in millions):
 
     
  (Decrease) 
 
Decrease in gains from sale transactions and related income as compared to 2007
 $(9.4)
Acquisition of assets by unconsolidated joint ventures
  (16.1)
     
  $(25.5)
     
 
The decrease in equity in net income of joint ventures is primarily due to promoted income of $14.3 million earned in 2007, related to the sale of certain joint venture assets. Additional losses aggregating $2.9 million that were recorded in 2008 related to impairment charges recorded by the Company’s joint ventures. In 2007, the Company’s unconsolidated joint ventures recognized an aggregate gain from the sale of joint venture assets of $96.9 million, of which the Company’s proportionate share was $20.8 million. However, $18.0 million of such amount was deferred due to the Company’s continuing involvement in certain assets.
 
Included in equity in net income of joint ventures is the effect of certain derivative instruments that are marked to market through earnings from the Company’s equity investment in Macquarie DDR Trust aggregating approximately $29.4 million of loss for the year ended December 31, 2008.
 
In addition to the sale of the DDR Markaz LLC joint venture assets in June 2007, the Company’s unconsolidated joint ventures sold one 25.5% effectively owned shopping center and six sites formerly occupied by Service Merchandise.
 
Impairment of joint venture investments is a result of the Company’s determination that several of its unconsolidated joint venture investments suffered an “other than temporary impairment” in the fourth quarter of 2008. Therefore, the Company recorded approximately $107.0 million of impairment charges associated with certain of its joint venture investments in accordance with APB 18. The provisions of this opinion require that a loss in value of an investment under the equity method of accounting that is an other than temporary decline must be recognized. A summary of the impairment charge by investment is as follows (in millions):
 
     
DDRTC Core Retail Fund LLC
 $47.3 
Macquarie DDR Trust
  31.7 
DDR-SAU Retail Fund LLC
  9.0 
Coventry II DDR Bloomfield LLC
  10.8 
Coventry II DDR Merriam Village LLC
  3.3 
RO & SW Realty LLC/Central Park Solon LLC
  3.2 
DPG Realty Holdings LLC
  1.7 
     
  $107.0 
     


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Minority interest expense decreased for the year ended December 31, 2008, primarily due to the following (in millions):
 
     
  Decrease 
 
Preferred operating partnership units (1)
 $9.7 
MV LLC (owned approximately 50% by the Company) (2)
  17.5 
Conversion of 0.5 million operating partnership units (“OP Units”) to common shares
  0.9 
Net increase in net income from consolidated joint venture investments
  1.3 
     
  $29.4 
     
 
 
(1)Preferred operating partnership units (“Preferred OP Units”) were issued in February 2007 as part of the financing of the IRRETI merger. These units were redeemed in June 2007.
 
(2)Primarily as result of the write-off of straight-line rent and impairment charges on the assets of this joint venture. See discussion above.
 
During 2008, the Company recognized a $17.4 million income tax benefit. Approximately $15.6 million of this amount related to the release of valuation allowances associated with deferred tax assets that were established in prior years. These valuation allowances were previously established due to the uncertainty that the deferred tax assets would be utilizable. As of December 31, 2008, the Company has no valuation allowances recorded against its deferred tax assets.
 
In order to maintain its REIT status, the Company must meet certain income tests to ensure that its gross income consists of passive income and not income from the active conduct of a trade or business. The Company utilizes its taxable REIT subsidiary (“TRS”) to the extent certain fee and other miscellaneous non-real estate related income cannot be earned by the REIT. During the third quarter of 2008, the Company began recognizing certain fee and miscellaneous other non-real estate related income within its TRS. Therefore, based on the Company’s evaluation of the current facts and circumstances, the Company determined during the third quarter of 2008 that the valuation allowance should be released as it was more-likely-than-not that the deferred tax assets would be utilized in future years. This determination was based upon the increase in fee and miscellaneous other non-real estate related income that is projected to be recognized within the Company’s TRS.
 
In 2007, the Company recognized an aggregate income tax benefit of approximately $14.6 million. In the first quarter, the Company recognized $15.4 million of the benefit as a result of the reversal of a previously established valuation allowance against deferred tax assets. The reserves were related to deferred tax assets established in prior years, at which time it was determined that it was more likely than not that the deferred tax asset would not be realized and, therefore, a valuation allowance was required. Several factors were considered in the first quarter of 2007 that contributed to the reversal of the valuation allowance. The most significant factor was the sale of merchant build assets by the Company’s TRS in the second quarter of 2007 and similar projected taxable gains for future periods. Other factors included the merger of various TRS’ and the anticipated profit levels of the Company’s TRS’, which will facilitate the realization of the deferred tax assets. Management regularly assesses established reserves and adjusts these reserves when facts and circumstances indicate that a change in estimates is warranted. Based upon these factors, management determined that it was more-likely-than-not that the deferred tax assets would be realized in the future and, accordingly, the valuation allowance recorded against those deferred tax assets was no longer required.
 
Discontinued Operations (in thousands)
 
                 
  2008  2007  $ Change  % Change 
 
Income from discontinued operations
 $1,409  $9,043  $(7,634)  (84.4)%
(Loss) gain on disposition of real estate, net of tax
  (4,830)  12,259   (17,089)  (139.4)
                 
  $(3,421) $21,302  $(24,723)  (116.1)%
                 
 
Included in discontinued operations for the years ended December 31, 2008 and 2007, are the results of 22 properties sold in 2008 (including one business center and one property held for sale at December 31,


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2007) aggregating 1.3 million square feet, and 67 properties sold in 2007 (including one property classified as held for sale at December 31, 2006, and 22 properties acquired through the IRRETI merger in 2007), aggregating 6.3 million square feet.
 
In September 2008, the Company sold its approximate 56% interest in one of its business centers to its partner for $20.7 million and recorded an aggregate loss of $5.8 million. The Company’s partner exercised its buy-sell rights provided under the joint venture agreement in July 2008 and the Company elected to sell its interest pursuant to the terms of the buy-sell right in mid-August 2008.
 
Gain on Disposition of Real Estate (in thousands)
 
                 
  2008  2007  $ Change  % Change 
 
Gain on disposition of real estate
 $6,962  $68,851  $(61,889)  (89.9)%
 
The Company recorded gains on disposition of real estate and real estate investments for the years ended December 31, 2008 and 2007, as follows (in millions):
 
         
  Year Ended
 
  December 31, 
  2008  2007 
 
Transfer of assets to Domestic Retail Fund (1)(2)
 $—  $1.8 
Transfer of assets to TRT DDR Venture I (1)(3)
  —   50.3 
Land sales (4)
  6.2   14.0 
Previously deferred gains and other gains and losses on dispositions (5)
  0.8   2.8 
         
  $7.0  $68.9 
         
 
 
(1)This disposition is not classified as discontinued operations due to the Company’s continuing involvement through its retained ownership interest and management agreements.
 
(2)The Company transferred two wholly-owned assets. The Company did not record a gain on the contribution of 54 assets, as these assets were recently acquired through the merger with IRRETI.
 
(3)The Company transferred three recently developed assets.
 
(4)These dispositions did not meet the criteria for discontinued operations as the land did not have any significant operations prior to disposition.
 
(5)These gains and losses are primarily attributable to the subsequent leasing of units related to master lease and other obligations originally established on disposed properties, which are no longer required.
 
Net (Loss) Income (in thousands)
 
                 
  2008  2007  $ Change  % Change 
 
Net (loss) income
 $(57,776) $276,047  $(333,823)  (120.9)%
                 
 
The decrease in net income for the year ended December 31, 2008, is primarily the result of non-cash impairment charges recorded relating to the Company’s consolidated real estate assets as well as its unconsolidated joint venture investments aggregating $169.2 million, net of amounts applicable to minority interests, a non-cash charge of $15.8 million related to the termination of an equity award plan and costs incurred of $28.3 million related to abandoned projects, transaction costs and other expenses partially offset by a gain on the repurchase of the Company’s senior notes of $11.6 million and lower transactional income earned during the same period in 2007


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relating to the transfer of 62 assets to unconsolidated joint venture interests and the sale of 67 assets to third parties in 2007. A summary of the changes in net income in 2008 compared to 2007 is as follows (in millions):
 
     
Decrease in net operating revenues (total revenues in excess of operating and maintenance expenses and real estate taxes) (1)
 $(19.9)
Increase in impairment charges
  (79.9)
Increase in general and administrative expenses (2)
  (16.5)
Increase in depreciation expense
  (27.6)
Decrease in interest income (3)
  (3.3)
Decrease in interest expense
  13.9 
Increase in gain on repurchase of senior notes
  11.6 
Increase in abandoned projects and transaction costs
  (12.4)
Change in other expense
  (12.8)
Decrease in equity in net income of joint ventures (4)
  (25.5)
Increase in impairment of joint ventures investments
  (107.0)
Decrease in minority interest expense
  29.4 
Change in income tax benefit (expense)
  2.8 
Decrease in income from discontinued operations
  (7.6)
Decrease in gain on disposition of real estate of discontinued operations properties
  (17.1)
Decrease in gain on disposition of real estate
  (61.9)
     
Decrease in net income
 $(333.8)
     
 
 
(1)Decrease primarily related to assets sold to joint ventures in 2007 and increased level of bad debt expense.
 
(2)Includes non-cash change of $15.8 million relating to the termination of an equity award plan.
 
(3)Increase primarily related to the IRRETI merger.
 
(4)Decrease primarily due to a reduction of promoted income associated with 2007 joint venture asset sales and impairment charges at two unconsolidated joint ventures in 2008.
 
Comparison of 2007 to 2006 Results of Operations
Continuing Operations
 
Revenues from Operations (in thousands)
 
                 
  2007  2006  $ Change  % Change 
 
Base and percentage rental revenues
 $645,955  $539,831  $106,124   19.7%
Recoveries from tenants
  203,126   168,935   34,191   20.2 
Ancillary and other property income
  19,518   19,434   84   0.4 
Management, development and other fee income
  50,840   30,294   20,546   67.8 
Other
  13,697   14,857   (1,160)  (7.8)
                 
Total revenues
 $933,136  $773,351  $159,785   20.7%
                 
 
Base and percentage rental revenues relating to new leasing, re-tenanting and expansion of the Core Portfolio Properties (shopping center properties owned as of January 1, 2006, but excluding properties under development/redevelopment and those classified as discontinued operations) (“Core Portfolio Properties”) increased


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approximately $7.0 million, or 1.5%, for the year ended December 31, 2007, as compared to the same period in 2006. The increase in base and percentage rental revenues was due to the following (in millions):
 
         
  Increase (Decrease) 
 
Core Portfolio Properties
 $7.0     
IRRETI merger
  106.8     
Development/redevelopment of shopping center properties
  7.3     
Disposition of shopping center properties in 2007 and 2006
  (11.6)    
Business center properties
  0.5     
Straight-line rents
  (3.9)    
         
  $106.1     
         
 
At December 31, 2007, the aggregate occupancy of the Company’s shopping center portfolio was 94.9%, as compared to 95.2% at December 31, 2006. The Company owned 710 shopping centers at December 31, 2007, as compared to 467 shopping centers at December 31, 2006. The average annualized base rent per occupied square foot was $12.24 at December 31, 2007, as compared to $11.56 at December 31, 2006. The increase was primarily due to the releasing of space during 2007 at higher amounts combined with higher rents attributable to the assets acquired from IRRETI.
 
At December 31, 2007, the aggregate occupancy of the Company’s wholly-owned shopping centers was 93.9%, as compared to 94.1% at December 31, 2006. The Company owned 353 wholly-owned shopping centers at December 31, 2007, as compared to 261 shopping centers at December 31, 2006. The average annualized base rent per leased square foot was $11.53 at December 31, 2007, as compared to $10.80 at December 31, 2006. The increase was primarily due to the releasing of space during 2007 at higher amounts combined with higher rents attributable to the assets acquired from IRRETI.
 
At December 31, 2007, the aggregate occupancy rate of the Company’s joint venture shopping centers was 95.9%, as compared to 96.9% at December 31, 2006. The Company’s joint ventures owned 357 shopping centers including 40 consolidated centers primarily owned through the MV LLC joint venture at December 31, 2007, as compared to 167 shopping centers and 39 consolidated centers at December 31, 2006. The average annualized base rent per leased square foot was $12.86 at December 31, 2007, as compared to $12.69 at December 31, 2006. The increase was a result of the mix of shopping center assets in the joint ventures at December 31, 2007, as compared to December 31, 2006, primarily related to the 2007 formation of three joint ventures, TRT DDR Venture I, DDR Domestic Retail Fund I (“Domestic Retail Fund”) and DDRTC Core Retail Fund LLC.
 
At December 31, 2007, the aggregate occupancy of the Company’s business centers was 70.0%, as compared to 42.1% at December 31, 2006. The increase in occupancy was primarily due to a large vacancy filled at a business center in Boston, Massachusetts. The business centers consisted of seven assets in five states at both December 31, 2007 and 2006.
 
Recoveries from tenants increased $34.2 million, or 20.2%, for the year ended December 31, 2007, as compared to the same period in 2006. This increase was primarily due to an increase in operating expenses and real estate taxes that aggregated $43.3 million, primarily due to the IRRETI merger in February 2007. Recoveries were approximately 85.1% and 86.4% of operating expenses and real estate taxes for the years ended December 31, 2007 and 2006, respectively.


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The increase in recoveries from tenants was primarily related to the following (in millions):
 
     
  Increase
 
  (Decrease) 
 
IRRETI merger
 $27.0 
Acquisition and development/redevelopment of shopping center properties in 2007 and 2006
  5.3 
Transfer of assets to unconsolidated joint ventures in 2007 and 2006
  (3.3)
Net increase in operating expenses at the remaining shopping center and business center properties
  5.2 
     
  $34.2 
     
 
Ancillary and other property income increased due to additional opportunities in the Core Portfolio Properties.
 
The increase in management, development and other fee income for the year ended December 31, 2007, was primarily due to the following (in millions):
 
     
  Increase
 
  (Decrease) 
 
Newly formed unconsolidated joint venture interests
 $11.4 
Development fee income
  3.0 
Asset management fee income
  3.3 
Other income
  2.3 
Sale of several of the Company’s unconsolidated joint venture properties
  (0.2)
Leasing commissions
  0.7 
     
  $20.5 
     
 
Other revenue was composed of the following (in millions):
 
         
  Year Ended
 
  December 31, 
  2007  2006 
 
Lease terminations and bankruptcy settlements (1)
 $5.0  $14.0 
Acquisition and financing fees (2)
  7.9   0.4 
Other
  0.8   0.5 
         
  $13.7  $14.9 
         
 
 
(1)For the year ended December 31, 2006, the Company executed lease terminations on four vacant Wal-Mart spaces in the Company’s consolidated portfolio.
 
(2)Included acquisition fees of $6.3 million earned from the formation of the DDRTC Core Retail Fund LLC joint venture in February 2007, excluding the Company’s retained ownership interest. The Company’s fee was earned in conjunction with services rendered by the Company in connection with the acquisition of the IRRETI real estate assets. Financing fees are earned in connection with the formation and refinancing of unconsolidated joint ventures, excluding the Company’s retained ownership interest. The Company’s fees are earned in conjunction with the closing and are based upon the amount of the financing transaction by the joint venture.


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Expenses from Operations (in thousands)
 
                 
  2007  2006  $ Change  % Change 
 
Operating and maintenance
 $131,409  $106,015  $25,394   24.0%
Real estate taxes
  107,428   89,505   17,923   20.0 
General and administrative
  81,244   60,679   20,565   33.9 
Depreciation and amortization
  214,445   180,377   34,068   18.9 
                 
  $534,526  $436,576  $97,950   22.4%
                 
 
Operating and maintenance expenses included the Company’s provision for bad debt expense, which approximated 0.9% and 0.8% of total revenues for the years ended December 31, 2007 and 2006, respectively (see Economic Conditions).
 
The increase in rental operation expenses, excluding general and administrative, was due to the following (in millions):
 
             
  Operating
       
  and
  Real Estate
    
  Maintenance  Taxes  Depreciation 
 
Core Portfolio Properties
 $4.0  $1.2  $3.5 
IRRETI merger
  15.2   17.7   32.7 
Acquisition and development/redevelopment of shopping center properties
  5.4   1.2   0.9 
Transfer of assets to unconsolidated joint ventures in 2007 and 2006
  (1.7)  (2.2)  (3.5)
Business center properties
  0.1   —   0.1 
Provision for bad debt expense
  2.4   —   — 
Personal property
  —   —   0.4 
             
  $25.4  $17.9  $34.1 
             
 
The increase in general and administrative expenses was primarily attributable to the merger with IRRETI and additional compensation expense as a result of the former president’s resignation as an executive officer of the Company effective May 2007. The Company recorded a charge of $4.1 million during the year ended December 31, 2007, related to this resignation, which includes, among other items, stock-based compensation charges recorded under the provisions of SFAS 123(R). In addition, the Company incurred integration costs in connection with the IRRETI acquisition that aggregated approximately $2.8 million for the year ended December 31, 2007. Total general and administrative expenses were approximately 4.5% and 4.8% of total revenues, including total revenues of unconsolidated joint ventures, for the years ended December 31, 2007 and 2006, respectively.
 
The Company continued to expense internal leasing salaries, legal salaries and related expenses associated with certain leasing and re-leasing of existing space. In addition, the Company capitalized certain direct and incremental internal construction and software development and implementation costs consisting of direct wages and benefits, travel expenses and office overhead costs of $12.8 million and $10.0 million in 2007 and 2006, respectively.
 
The Company adopted SFAS 123(R) as required on January 1, 2006, using the modified prospective method. As a result, the Company’s consolidated financial statements as of and for the year ended December 31, 2006, reflect the impact of SFAS 123(R). In accordance with the modified prospective method, the Company’s consolidated financial statements for prior periods have not been restated to reflect the impact of SFAS 123(R). The compensation cost recognized under SFAS 123(R) was approximately $11.9 million and $8.3 million for the years ended December 31, 2007 and 2006, respectively. In December 2007, the Board of Directors approved the 2007 Supplemental Equity Award Program for certain officers of the Company. The Company recognized $0.4 million of expense related to this plan in 2007. For the year ended December 31, 2007, the Company


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capitalized $0.3 million of stock-based compensation. There were no significant capitalized stock-based compensation costs in 2006.
 
Other Income and Expenses (in thousands)
 
                 
  2007  2006  $ Change  % Change 
 
Interest income
 $8,772  $9,050  $(278)  (3.1)%
Interest expense
  (258,149)  (208,536)  (49,613)  23.8 
Other expense, net
  (3,019)  (446)  (2,573)  576.9 
                 
  $(252,396) $(199,932) $(52,464)  26.2%
                 
 
Interest income for the year ended December 31, 2007, included excess cash held by the Company as a result of the IRRETI merger. Interest income for the year ended December 31, 2006, included advances to one of the Company’s joint ventures, which were repaid in August 2006.
 
Interest expense increased primarily due to the IRRETI merger and associated borrowing combined with development assets becoming operational. The weighted-average debt outstanding and related weighted-average interest rates were as follows:
 
         
  Year Ended
 
  December 31, 
  2007  2006 
 
Weighted-average debt outstanding (billions)
 $5.4  $4.1 
Weighted-average interest rate
  5.4%  5.8%
 
         
  At December 31, 
  2007  2006 
 
Weighted-average interest rate
  5.2%  5.8%
 
The reduction in the weighted-average interest rate in 2007 was primarily related to the Company’s issuance of $850 million of senior convertible notes in August 2006 and March 2007 with a weighted-average coupon rate of 3.2% and the decline in short-term interest rates. Interest costs capitalized, in conjunction with development and expansion projects and unconsolidated development joint venture interests, were $26.9 million for the year ended December 31, 2007, compared to $20.0 million for the same period in 2006.
 
Other expense primarily relates to abandoned acquisition and development project costs, litigation costs, formation costs associated with the Company’s joint venture with ECE and other non-recurring income and expenses. In 2006, the Company received proceeds of approximately $1.3 million from a litigation settlement.
 
Other (in thousands)
 
                 
  2007  2006  $ Change  % Change 
 
Equity in net income of joint ventures
 $43,229  $30,337  $12,892   42.5%
Minority interests
  (18,218)  (8,893)  (9,325)  104.9 
Income tax benefit of taxable REIT subsidiaries and franchise taxes
  14,669   2,497   12,172   487.5 


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A summary of the increase in equity in net income of joint ventures for the year ended December 31, 2007, was composed of the following (in millions):
 
     
  Increase
 
  (Decrease) 
 
Increase in gains from sale transactions as compared to 2006
 $6.3 
Purchase of joint venture interests by DDR
  (0.7)
Acquisition of assets by unconsolidated joint ventures
  6.5 
Primarily re-tenanting and refinancing at two joint ventures
  0.5 
Various other increases
  0.3 
     
  $12.9 
     
 
The increase in equity in net income of joint ventures was primarily due to an increase in promoted income and gains from the disposition of unconsolidated joint venture assets in 2007. During the year ended December 31, 2007, the Company received $14.3 million of promoted income, of which $13.6 million related to the sale of assets from the DDR Markaz LLC joint venture to Domestic Retail Fund. During the year ended December 31, 2006, the Company received $5.5 million of promoted income from the disposition of a joint venture asset in Kildeer, Illinois. In 2007, the Company’s unconsolidated joint ventures recognized an aggregate gain from the sale of joint venture assets of $96.9 million, of which the Company’s proportionate share was $20.8 million. However, $18.0 million of such amount was deferred due to the Company’s continuing involvement in certain assets. In 2006, the Company’s unconsolidated joint ventures recognized an aggregate gain from the sale of joint venture assets of $20.3 million, of which the Company’s proportionate share was $3.1 million.
 
In addition to the sale of the DDR Markaz LLC joint venture assets in June 2007, the Company’s unconsolidated joint ventures sold the following assets in 2007 and 2006:
 
   
2007 Dispositions
 
2006 Dispositions
 
One 25.5% effectively owned shopping center
 One 50% effectively owned shopping center
Six sites formerly occupied by Service Merchandise
 Four 25.5% effectively owned shopping centers
  One 20.75% effectively owned shopping center
  Two sites formerly occupied by Service Merchandise
  One 10% effectively owned shopping center
 
Minority interest expense increased for the year ended December 31, 2007, primarily due to the following (in millions):
 
     
  (Increase)
 
  Decrease 
 
Preferred OP Units (1)
 $(9.7)
MV LLC
  (0.1)
2007 acquisition of remaining interest in Coventry I
  0.3 
Decrease due to newly formed joint venture under development
  0.2 
     
  $(9.3)
     
 
 
(1)Preferred OP Units were issued in February 2007 as part of the financing of the IRRETI merger. These units were redeemed in June 2007.
 
In 2007, the Company recognized an aggregate income tax benefit of approximately $14.6 million. In the first quarter, the Company recognized $15.4 million of the benefit as a result of the reversal of a previously established valuation allowance against deferred tax assets. The reserves were related to deferred tax assets established in prior years, at which time it was determined that it was more likely than not that the deferred tax asset would not be realized and, therefore, a valuation allowance was required. Several factors were considered in the first quarter of 2007 that contributed to the reversal of the valuation allowance. The most significant factor was the sale of merchant build assets by the Company’s taxable REIT subsidiary in the second quarter of 2007 and similar projected taxable gains for future periods. Other factors included the merger of various TRS’ and the anticipated


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profit levels of the Company’s TRS’, which will facilitate the realization of the deferred tax assets. Management regularly assesses established reserves and adjusts these reserves when facts and circumstances indicate that a change in estimates is necessary. Based upon these factors, management determined that it was more likely than not that the deferred tax assets would be realized in the future and, accordingly, the valuation allowance recorded against those deferred tax assets was no longer required.
 
Discontinued Operations (in thousands)
 
                 
  2007  2006  $ Change  % Change 
 
Income from discontinued operations
 $9,043  $9,406  $(363)  (3.9)%
Gain on disposition of real estate, net of tax
  12,259   11,051   1,208   10.9 
                 
  $21,302  $20,457  $845   4.1%
                 
 
Included in discontinued operations for the years ended December 31, 2007 and 2006, are the results of 22 properties sold in 2008 (including one property held for sale at December 31, 2007), aggregating 1.3 million square feet, 67 properties sold in 2007 (including one property classified as held for sale at December 31, 2006, and 22 properties acquired through the IRRETI merger in 2007), aggregating 6.3 million square feet and six properties sold in 2006, aggregating 0.8 million square feet.
 
Gain on Disposition of Real Estate (in thousands)
 
                 
  2007  2006  $ Change  % Change 
 
Gain on disposition of real estate
 $68,851  $72,023  $(3,172)  (4.4)%
 
The Company recorded gains on disposition of real estate and real estate investments for the years ended December 31, 2007 and 2006, as follows (in millions):
 
         
  Year Ended
 
  December 31, 
  2007  2006 
 
Transfer of assets to Domestic Retail Fund (1)(2)
 $1.8  $— 
Transfer of assets to TRT DDR Venture I (1)(3)
  50.3   — 
Transfer of assets to DPG Realty Holdings LLC (1)(4)
  —   0.6 
Transfer of assets to DDR Macquarie Fund (1)(5)
  —   9.2 
Transfer of assets to DDR MDT PS LLC (1)(6)
  —   38.9 
Transfer of assets to Service Holdings LLC (1)(7)
  —   6.1 
Land sales (8)
  14.0   14.8 
Previously deferred gains and other gains and losses on sales (9)
  2.8   2.4 
         
  $68.9  $72.0 
         
 
 
(1)This disposition was not classified as discontinued operations due to the Company’s continuing involvement through its retained ownership interest and management agreements.
 
(2)The Company transferred two wholly-owned assets. The Company did not record a gain on the contribution of 54 assets, as these assets were recently acquired through the merger with IRRETI.
 
(3)The Company transferred three recently developed assets.
 
(4)The Company transferred a newly developed expansion area adjacent to a shopping center owned by the joint venture.
 
(5)The Company transferred newly developed expansion areas adjacent to four shopping centers owned by the joint venture in 2006. The Company did not record a gain on the contribution of three assets in 2007, as these assets were recently acquired through the merger with IRRETI.
 
(6)The Company transferred six recently developed assets.
 
(7)The Company transferred 51 retail sites previously occupied by Service Merchandise.


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(8)These dispositions did not meet the criteria for discontinued operations as the land did not have any significant operations prior to disposition.
 
(9)These gains and losses were primarily attributable to the subsequent leasing of units related to master lease and other obligations originally established on disposed properties, which were no longer required.
 
Net Income (in thousands)
 
                 
  2007  2006  $ Change  % Change 
 
Net Income
 $276,047  $253,264  $22,783   9.0%
                 
 
Net income increased primarily due to (i) the merger with IRRETI, (ii) the release of certain tax valuation reserves and (iii) income earned from recently formed unconsolidated joint ventures and promoted income related to the sale of assets from unconsolidated joint ventures. These increases were partially offset by (i) IRRETI merger integration related costs and (ii) a charge relating to the former president’s resignation as an executive officer. A summary of the changes in net income in 2007 compared to 2006 was as follows (in millions):
 
     
Increase in net operating revenues (total revenues in excess of operating and maintenance expenses and real estate taxes)
 $116.6 
Increase in general and administrative expenses
  (20.6)
Increase in depreciation expense
  (34.1)
Decrease in interest income
  (0.3)
Increase in interest expense
  (49.6)
Change in other expense
  (2.6)
Increase in equity in net income of joint ventures
  12.9 
Increase in minority interest expense
  (9.3)
Change in income tax benefit (expense)
  12.2 
Decrease in income from discontinued operations
  (0.4)
Increase in gain on disposition of real estate of discontinued operations properties
  1.2 
Decrease in gain on disposition of real estate
  (3.2)
     
Increase in net income
 $22.8 
     
 
FUNDS FROM OPERATIONS
 
The Company believes that FFO, which is a non-GAAP financial measure, provides an additional and useful means to assess the financial performance of REITs. FFO is frequently used by securities analysts, investors and other interested parties to evaluate the performance of REITs, most of which present FFO along with net income as calculated in accordance with GAAP.
 
FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and real estate investments, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions, and many companies utilize different depreciable lives and methods. Because FFO excludes depreciation and amortization unique to real estate, gains and certain losses from depreciable property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition and development activities and interest costs. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP.
 
FFO is generally defined and calculated by the Company as net income, adjusted to exclude: (i) preferred share dividends, (ii) gains from disposition of depreciable real estate property, except for those sold through the Company’s merchant building program, which are presented net of taxes, (iii) extraordinary items and (iv) certain non-cash items. These non-cash items principally include real property depreciation, equity income from joint


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ventures and equity income from minority equity investments and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and minority equity investments, determined on a consistent basis.
 
For the reasons described above, management believes that FFO provides the Company and investors with an important indicator of the Company’s operating performance. It provides a recognized measure of performance other than GAAP net income, which may include non-cash items (often significant). Other real estate companies may calculate FFO in a different manner.
 
This measure of performance is used by the Company for several business purposes and by other REITs. The Company uses FFO in part (i) to determine incentives for executive compensation based on the Company’s performance, (ii) as a measure of a real estate asset’s performance, (iii) to shape acquisition, disposition and capital investment strategies and (iv) to compare the Company’s performance to that of other publicly traded shopping center REITs.
 
Management recognizes FFO’s limitations when compared to GAAP’s income from continuing operations. FFO does not represent amounts available for needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. Management does not use FFO as an indicator of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs, including the payment of dividends. FFO should not be considered an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. FFO is simply used as an additional indicator of the Company’s operating performance.
 
In 2008, FFO applicable to common shareholders was $183.8 million, as compared to $465.0 million in 2007 and $377.8 million in 2006. The decrease in FFO for the year ended December 31, 2008, is primarily the result of non-cash impairment charges recorded relating to the Company’s consolidated real estate assets as well as its unconsolidated joint venture investments aggregating approximately $169.2 million, net of amounts applicable to minority interests, a non-cash charge of $15.8 million related to the termination of an equity award plan and costs incurred of $28.3 million related to abandoned projects, transaction costs and other expenses partially offset by gains on the repurchase of the Company’s senior notes at a discount of approximately $11.6 million. In addition, the Company recognized a reduced amount of transactional income, primarily related to gains on disposition of real estate that occurred in 2007, as the Company transferred 62 assets to unconsolidated joint venture interests and sold 67 assets to third parties in 2007. The Company’s calculation of FFO is as follows (in thousands):
 
             
  For the Years Ended 
  2008  2007  2006 
 
Net (loss) income applicable to common shareholders (1)
 $(100,045) $225,113  $198,095 
Depreciation and amortization of real estate investments
  236,344   214,396   185,449 
Equity in net (loss) income of joint ventures
  (17,719)  (43,229)  (30,337)
Joint ventures’ FFO (2)
  68,355   84,423   44,473 
Minority equity interests (OP Units)
  1,145   2,275   2,116 
Gain on disposition of depreciable real estate (3)
  (4,244)  (17,956)  (21,987)
             
FFO applicable to common shareholders
  183,836   465,022   377,809 
Preferred share dividends
  42,269   50,934   55,169 
             
Total FFO
 $226,105  $515,956  $432,978 
             
 
 
(1)Includes straight-line rental revenues of approximately $8.0 million, $12.1 million and $16.0 million in 2008, 2007 and 2006, respectively (including discontinued operations).


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(2)Joint ventures’ FFO is summarized as follows (in thousands):
 
             
  For the Years Ended
  2008 2007 2006
 
Net income (a)
 $24,951  $169,195  $92,624 
Depreciation and amortization of real estate investments
  241,651   193,437   83,017 
Loss (gain) on disposition of real estate, net (b)
  (7,350)  (91,111)  (22,013)
             
  $259,252  $271,521  $153,628 
             
DDR Ownership interests (c)
 $68,355  $84,423  $44,473 
             
 
 
(a)Includes straight-line rental revenues of $6.3 million, $9.3 million and $5.1 million in 2008, 2007 and 2006, respectively. The Company’s proportionate share of straight-line rental revenues was $0.8 million, $1.4 million and $0.9 million in 2008, 2007 and 2006, respectively. These amounts include discontinued operations.
 
(b)The gain or loss on disposition of recently developed shopping centers, generally owned by the TRS’, is included in FFO, as the Company considers these properties part of the merchant building program. These properties were either developed through the Retail Value Investment Program with Prudential Real Estate Investors, or were assets sold in conjunction with the formation of the joint venture that holds the designation rights for the Service Merchandise properties. For the year ended December 31, 2007, an aggregate gain of $5.8 million was recorded, of which $1.8 million was the Company’s proportionate share. For the year ended December 31, 2006, a loss of $1.3 million was recorded, of which $0.3 million was the Company’s proportionate share.
 
(c)The Company’s share of joint venture net income has been increased by $0.4 million, reduced by $1.2 million and increased by $1.6 million for the years ended December 31, 2008, 2007 and 2006, respectively. These amounts are related to basis differences in depreciation and adjustments to gain on sales. During the year ended December 31, 2007, the Company received $14.3 million of promoted income, of which $13.6 million related to the sale of assets from DDR Markaz LLC to Domestic Retail Fund, which is included in the Company’s proportionate share of net income and FFO. During the year ended December 31, 2006, the Company received $5.5 million of promoted income from the disposition of a joint venture asset in Kildeer, Illinois.
 
At December 31, 2008, 2007 and 2006, the Company owned unconsolidated joint venture interests relating to 329, 317 and 167 operating shopping center properties, respectively.
 
(3)The amount reflected as gain on disposition of real estate and real estate investments from continuing operations in the consolidated statements of operations includes residual land sales, which management considers to be the disposition of non-depreciable real property and the sale of newly developed shopping centers, for which the Company maintained continuing involvement. These dispositions are included in the Company’s FFO and therefore are not reflected as an adjustment to FFO. For the years ended December 31, 2008, 2007 and 2006, net gains resulting from residual land sales aggregated $6.2 million, $14.0 million and $14.8 million, respectively. For the years ended December 31, 2008, 2007 and 2006, merchant building gains, net of tax, aggregated $0.4 million, $49.1 million and $46.3 million, respectively.


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LIQUIDITY AND CAPITAL RESOURCES
 
The Company relies on capital to buy, develop and improve its shopping center properties. Events in 2008 and early 2009, including recent failures and near failures of a number of large financial services companies, have made the capital markets increasingly volatile. The Company periodically evaluates opportunities to issue and sell additional debt or equity securities, obtain credit facilities from lenders, or repurchase, refinance or otherwise restructure long-term debt for strategic reasons, or to further strengthen the financial position of the Company.
 
The Company maintains an unsecured revolving credit facility with a syndicate of financial institutions, for which JP Morgan serves as the administrative agent (the “Unsecured Credit Facility”). The Unsecured Credit Facility provides for borrowings of $1.25 billion if certain financial covenants are maintained and an accordion feature for a future expansion to $1.4 billion upon the Company’s request, provided that new or existing lenders agree to the existing terms of the facility and increase their commitment level, and a maturity date of June 2010, with a one-year extension option. The Company also maintains a $75 million unsecured revolving credit facility with National City Bank (together with the Unsecured Credit Facility, the “Revolving Credit Facilities”). This facility has a maturity date of June 2010, with a one-year extension option at the option of the Company subject to certain customary closing conditions. The Revolving Credit Facilities and the indentures under which the Company’s senior and subordinated unsecured indebtedness is, or may be, issued contain certain financial and operating covenants and require the Company to comply with certain covenants including, among other things, leverage ratios, debt service coverage and fixed charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets and engage in mergers and certain acquisitions. These credit facilities and indentures also contain customary default provisions including the failure to timely pay principal and interest payable thereunder, the failure to comply with the Company’s financial and operating covenants, the occurrence of a material adverse effect on the Company, and the failure to pay when due any other Company consolidated indebtedness (including non-recourse obligations) in excess of $50 million. In the event our lenders declare a default, as defined in the applicable loan documentation, this could result in our inability to obtain further fundingand/or an acceleration of any outstanding borrowings.
 
As of December 31, 2008, the Company was in compliance with all of its financial covenants. However, due to the economic environment, the Company has less financial flexibility than desired given the current market dislocation. The Company’s current business plans indicate that it will be able to operate in compliance with these covenants in 2009 and beyond; however, the current dislocation in the global credit markets has significantly impacted the projected cash flows, financial position and effective leverage of the Company. If there is a continued decline in the retail and real estate industries and a decline in consumer confidence leading to a decline in consumer spendingand/or the Company is unable to successfully execute plans as further described below, the Company could violate these covenants, and as a result may be subject to higher finance costs and feesand/oraccelerated maturities. In addition, certain of the Company’s credit facilities and indentures permit the acceleration of the maturity of debt issued thereunder in the event certain other debt of the Company has been accelerated. Furthermore, a default under a loan to the Company or its affiliates, a foreclosure on a mortgaged property owned by the Company or its affiliates or the inability to refinance existing indebtedness would have a negative impact on the Company’s financial condition, cash flows and results of operations. These facts and an inability to predict future economic conditions have encouraged the Company to adopt a strict focus on lowering leverage and increasing financial flexibility.
 
At December 31, 2008, the following information summarizes the availability of the Revolving Credit Facilities (in billions):
 
     
Revolving Credit Facilities
 $1.325 
Less:
    
Amount outstanding
  (1.027)
Unfunded Lehman Brothers Holdings Commitment
  (0.008)
Letters of credit
  (0.007)
     
Amount Available
 $0.283 
     


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As of December 31, 2008, the Company had cash of $29.5 million. As of December 31, 2008, the Company also had 290 unencumbered consolidated operating properties generating $465.1 million, or 50.0% of the total revenue of the Company for the year ended December 31, 2008, thereby providing a potential collateral base for future borrowings or to sell to generate cash proceeds, subject to consideration of the financial covenants on unsecured borrowings.
 
In 2008, Lehman Brothers Holdings Inc. (“Lehman Holdings”) filed for protection under Chapter 11 of the United States Bankruptcy Code. Subsequently, Lehman Commercial Paper Inc. (“Lehman CPI”), a subsidiary of Lehman Holdings, also filed for protection under Chapter 11 of the United States Bankruptcy Code. Lehman CPI had a $20.0 million credit commitment under the Company’s Unsecured Credit Facilities and, at the time of the filing of this annual report, approximately $7.6 million of Lehman CPI’s commitment was undrawn. The Company was notified that Lehman CPI’s commitment would not be assumed. As a result, the Company’s availability under the Unsecured Credit Facility was effectively reduced by approximately $7.6 million. The Company does not believe that this reduction of credit has a material effect on the Company’s liquidity and capital resources.
 
The Company anticipates that cash flow from operating activities will continue to provide adequate capital for all scheduled interest and monthly principal payments on outstanding indebtedness, recurring tenant improvements and dividend payments in accordance with REIT requirements.
 
The retail and real estate markets have been significantly impacted by the continued deterioration of the global credit markets and other macro economic factors including, among others, rising unemployment and a decline in consumer confidence leading to a decline in consumer spending. Although a majority of the Company’s tenants remain in relatively strong financial standing, especially the anchor tenants, the current recession has resulted in tenant bankruptcies affecting the Company’s real estate portfolio including Mervyns, Linens ’n Things, Steve & Barry’s, Goody’s and Circuit City. In addition, certain other tenants may be experiencing financial difficulties. Due to the timing of these bankruptcies in the second half of 2008, they did not have a significant impact on the cash flows during 2008 as compared to the Company’s internal projections. However, given the expected decrease in occupancy and the projected timing associated with re-leasing these vacated spaces, the 2009 forecasts have been revised to reflect these events and the potential for further deterioration and the incorporation of expectations associated with the timing it will take to release the vacant space. This situation has resulted in downward pressure on the Company’s 2009 projected operating results. The reduced occupancy will likely have a negative impact on the Company’s consolidated cash flows, results of operations, financial position and financial ratios that are integral to the continued compliance with the covenants on the Company’s line of credit facilities as further described above. Offsetting some of the current challenges within the retail environment, the Company has a low occupancy cost relative to other retail formats and historical averages, as well as a diversified tenant base with only one tenant exceeding 2.5% of total consolidated revenues, Wal-Mart at 4.5%. Other significant tenants include Target, Lowe’s Home Improvement, Home Depot, Kohl’s, T.J. Maxx/Marshalls, Publix Supermarkets, PetSmart and Bed Bath & Beyond, all of which have relatively strong credit ratings. Management believes these tenants should continue providing the Company with a stable ongoing revenue base for the foreseeable future given the long-term nature of these leases. Moreover, the majority of the tenants in the Company’s shopping centers provide day-to-day consumer necessities versus high priced discretionary luxury items with a focus toward value and convenience, which should enable many tenants to continue operating within this challenging economic environment. Furthermore, LIBOR rates, the rates upon which the Company’s variable-rate debt is based, are at historic lows and are expected to have a positive impact on the cash flows.
 
The Company is committed to prudently managing and minimizing discretionary operating and capital expenditures and raising the necessary equity and debt capital to maximize liquidity, repay outstanding borrowings as they mature and comply with financial covenants in 2009 and beyond. As discussed below, the Company plans to raise additional equity and debt through a combination of retained capital, the issuance of common shares, debt financing and refinancing and asset sales. In addition, the Company will strategically utilize proceeds from the above sources to repay outstanding borrowings on its credit facilities and strategically repurchase our publicly traded debt at a discount to par to further improve leverage ratios.
 
  • Retained Equity — With regard to retained capital, the Company has adjusted its dividend policy to the minimum required to maintain its REIT status. The Company did not pay a dividend in January 2009 as it


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 had already distributed sufficient funds to comply with its 2008 tax requirements. Moreover, the Company expects to fund a portion of its 2009 dividend payout through common shares and has the flexibility to distribute up to 90% of dividends in shares. This new policy is consistent with the Company’s top priorities to improve liquidity and lower leverage. This change in dividend payment is expected to save in excess of $300 million of retained capital in 2009.
 
  • Issuance of Common Shares — The Company has several alternatives to raise equity through the sale of its common shares. In December 2008, the Company issued $41.9 million of equity capital through its continuous equity program. The Company intends to continue to issue additional shares under this program in 2009. On February 23, 2009, the Company entered into purchase agreements with an investor for the sale of 30 million of the Company’s common shares and warrants for 10 million of the Company’s common shares for additional potential cash in the future. The sale of the common shares and warrants is subject to shareholder approval and the satisfaction or waiver of customary and other conditions. There can be no assurances the Company will be able to obtain such approval or satisfy such conditions. The Company intends to use the estimated $112.5 million in gross proceeds received from this strategic investment in 2009 to reduce leverage.
 
  • Debt Financing and Refinancing — The Company had approximately $372.8 million of consolidated debt maturities during 2009, excluding obligations where there is an extension option. The largest debt maturity in 2009 related to the repayment of senior unsecured notes in the amount of $227.0 million in January 2009. Funding of this repayment was primarily through retained capital and Revolving Credit Facilities. The remaining $145.8 million in maturities is related to various loans secured by certain shopping centers. The Company plans to refinance approximately $80 million of this remaining indebtedness related to two assets. Furthermore, the Company has received lender approval to extend three mortgage loans aggregating $29.6 million. All three loans are scheduled to mature in the first quarter of 2009. The Company is planning to either repay the remaining maturities with its Revolving Credit Facility or financings discussed below or seek extensions with the existing lender.
 
The Company is also in active discussions with various life insurance companies regarding the financing of assets that are currently unencumbered. The total loan proceeds are expected to range from $100 million to $200 million depending on the number of assets financed. The loan-to-value ratio required by these lenders is expected to fall within the 50% to 60% range.
 
  • Asset Sales — During the months of January and February 2009, the Company and its consolidated joint ventures sold seven assets generating in excess of $65.8 million in gross proceeds. During 2008, the Company and its joint ventures sold 23 assets generating aggregate gross proceeds of almost $200 million, of which the Company’s proportionate share aggregated $136.1 million. The Company is also in various stages of discussions with third parties for the sale of additional assets with aggregate values in excess of $500 million, including four assets that are under contract or subject to letters of intent, aggregating $30 million, of which the Company’s share is approximately $14 million.
 
  • Debt Repurchases — Given the current economic environment, the Company’s publicly traded debt securities are trading at significant discounts to par. During the fourth quarter of 2008 and in January 2009, the Company repurchased approximately $77.1 million of debt securities at a discount to par aggregating $15.2 million. Although $48 million of this debt repurchase reflected above related to unsecured debt maturing in January 2009 at a small discount, the debt with maturities in 2010 and beyond are trading at much wider discounts. The Company intends to utilize the proceeds from retained capital, equity issuances, secured financing and asset sales, as discussed above, to repurchase its debt securities at a discount to par to further improve its leverage ratios.
 
As further described above, although the Company believes it has several viable alternatives to address its objectives of reducing leverage and continuing to comply with its covenants and repay obligations as they become due, the Company does not have binding agreements for all of the planned transactions discussed above, and therefore, there can be no assurances that the Company will be able to execute these plans, which could adversely impact the Company’s operations including its ability to remain complaint with its covenants.


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Part of the Company’s overall strategy includes addressing debt maturing in years following 2009. The Company has been very careful to balance the amount and timing of its debt maturities. Additionally, in January 2009, the Company purchased an additional $10 million of senior notes at a discount to par. Notably, following the repayment of $227.0 million of senior notes in January 2009, the Company has no major maturities until May 2010, providing time to address the larger maturities, including the Company’s credit facilities, which occur in 2010 through 2012. The Company continually evaluates its debt maturities, and based on management’s current assessment, believes it has viable financing and refinancing alternatives that may materially impact its expected financial results as interest rates in the future will likely be at levels higher than the amounts we are presently incurring. Although the credit environment has become much more difficult since the third quarter of 2008, the Company continues to pursue opportunities with the largest U.S. banks, select life insurance companies, certain local banks and some international lenders. The approval process from the lenders has slowed, but lenders are continuing to execute financing agreements. While pricing and loan-to-value ratios remain dependent on specific deal terms, in general, pricing spreads are higher and loan-to-values ratios are lower. Moreover, the Company continues to look beyond 2009 to ensure that the Company is prepared if the current credit market dislocation continues (See Contractual Obligations and Other Commitments).
 
The Company’s 2010 debt maturities consist of: $497.9 million of unsecured notes, of which $199.5 million mature in May 2010 and $298.4 million mature in August 2010; $393.9 million of consolidated mortgage debt; $32.5 million of construction loans; $1.0 billion of unsecured revolving credit facilities and $1.6 billion of unconsolidated joint venture mortgage debt. The Company’s unsecured Revolving Credit Facilities allow for a one-year extension option at the option of the Company. Of the 2010 unconsolidated joint venture mortgage debt, the Company or the joint venture has the option to extend approximately $579.3 million at existing terms. In January 2009, the Company repurchased approximately $7.2 million of the notes maturing in 2010 with proceeds from its Unsecured Credit Facility. The Company may repurchase additional unsecured notes on the public market as operating cashand/or cash from equity and debt raises becomes available.
 
These obligations generally require monthly payments of principaland/orinterest over the term of the obligation. In light of the current economic conditions, no assurance can be provided that the aforementioned obligations will be refinanced or repaid as currently anticipated. Also, additional financing may not be available at all or on terms favorable to the Company (See Contractual Obligations and Other Commitments).
 
The Company’s core business of leasing space to well-capitalized retailers continues to perform well, as the Company’s primarily discount-oriented tenants gain market share from retailers offering higher price points and offering more discretionary goods. These long-term leases generate consistent and predictable cash flow after expenses, interest payments and preferred share dividends. This capital is available for use at the Company’s discretion for investment, debt repayment, share repurchases and the payment of dividends on the common shares.
 
The Company’s cash flow activities are summarized as follows (in thousands):
 
             
  Year Ended December 31, 
  2008  2007  2006 
 
Cash flow provided by operating activities
 $424,568  $414,616  $340,692 
Cash flow used for investing activities
  (464,341)  (1,148,316)  (203,047)
Cash flow provided by (used for) financing activities
  22,698   755,491   (139,922)
 
Operating Activities:  The increase in operating activities in 2008 as compared to 2007 is primarily due to the IRRETI merger in 2007 and decreased transactional activity in 2008.
 
Investing Activities:  Capital expenditures in 2008 were primarily for the completion of redevelopment projects and the ongoing construction of severalground-updevelopment projects. During the year ended December 31, 2007, the Company completed a $3.1 billion merger with IRRETI, which closed in February 2007, and sold 62 assets to joint ventures and 66 assets to third parties in 2007.
 
Financing Activities:  The change in cash provided by financing activities in 2008 as compared to 2007, is primarily due to a reduction in both the acquisition and sale of assets combined with the related financing activities associated with the transactions.


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During 2007, the Company’s Board of Directors authorized a common share repurchase program. Under the terms of the program, the Company may purchase up to a maximum value of $500 million of its common shares over a two-year period. Through December 31, 2007, the Company had repurchased 5.6 million of its common shares under this program in open market transactions at an aggregate cost of approximately $261.9 million. From January 1, 2008 through February 13, 2009, the Company has not repurchased any of its common shares.
 
The Company satisfied its REIT requirement of distributing at least 90% of ordinary taxable income with declared common and preferred share dividends of $290.9 million in 2008, as compared to $371.0 million and $313.1 million in 2007 and 2006, respectively. Accordingly, federal income taxes were not incurred at the corporate level for 2008. The Company’s common share dividend payout ratio for the year approximated 135.9% of its 2008 FFO, as compared to 70.4% and 68.8% in 2007 and 2006, respectively.
 
For each of the first three quarters of 2008, the Company paid a quarterly dividend of $0.69 per common share. As part of the Company’s strategy of preserving capital and de-leveraging its balance sheet, the Board of Directors of the Company did not declare a fourth quarter dividend as the Company had already complied with its REIIT requirements. In October 2008, based upon the Company’s current results of operations and debt maturities, the Company’s Board of Directors approved a 2009 dividend policy that will maximize the Company’s free cash flow, while still adhering to REIT payout requirements. This payout policy will result in a 2009 annual dividend at or near the minimum distribution required to maintain REIT status. The Company will continue to monitor the 2009 dividend policy and provide for adjustments as determined in the best interest of the Company and its shareholders. The 2009 payout policy should result in additional free cash flow, which is expected to be applied primarily to reduce leverage (see Off-Balance Sheet Arrangements and Contractual Obligations and Other Commitments for further discussion of capital resources).


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ACQUISITIONS, DEVELOPMENTS, REDEVELOPMENTS AND EXPANSIONS
 
During the three years ended December 31, 2008, the Company and its consolidated and unconsolidated joint ventures expended $7.9 billion, net of dispositions, to acquire, develop, redevelop, expand, improve and re-tenant its properties as follows (in millions):
 
             
  2008  2007  2006 
 
Company (including Consolidated Joint Ventures):
            
Acquisitions
 $10.9  $3,048.7(5) $370.2(9)
Completed expansions
  27.8   32.7   73.1 
Developments and construction in progress
  419.5   428.5   246.0 
Tenant improvements and building renovations (1)
  11.6   12.5   11.7 
Furniture, fixtures and equipment
  6.3(2)  13.0(2)  10.2(2)
Foreign currency adjustments
  (41.3)  —   — 
             
   434.8   3,535.4   711.2 
Less: Real estate dispositions and property contributed to joint ventures
  (312.9)(3)  (2,001.3)(6)  (289.8)(10)
             
Company total
  121.9   1,534.1   421.4 
             
Unconsolidated Joint Ventures:
            
Acquisitions/contributions
  111.4(4)  4,987.4(7)  729.9(11)
Completed expansions
  52.8   21.9   — 
Developments and construction in progress
  315.8   142.7   139.6(12)
Tenant improvements and building renovations (1)
  18.4   9.8   9.1 
Foreign currency adjustments
  (106.2)  48.5   — 
             
   392.2   5,210.3   878.6 
Less: Real estate dispositions
  (61.9)(4)  (204.3)(8)  (409.0)(13)
             
Joint ventures total
  330.3   5,006.0   469.6 
             
   452.2   6,540.1   891.0 
Less: Proportionate joint venture share owned by others
  (253.5)  (2,825.5)  (401.0)
             
Total DDR net additions
 $198.7  $3,714.6  $490.0 
             
 
 
(1)In 2009, the Company anticipates recurring capital expenditures, including tenant improvements, of approximately $13 million associated with its wholly-owned and consolidated portfolio and $19 million associated with its unconsolidated joint venture portfolio.
 
(2)Includes certain information technology projects, expansion of the Company’s headquarters and fractional ownership interests in corporate planes.
 
(3)Includes 22 asset dispositions as well as outparcel sales.
 
(4)Reflects the acquisition of a shopping center by a newly formed joint venture and the respective sale of this asset by an unrelated joint venture.
 
(5)Includes the merger with IRRETI, the redemption of OP units and the acquisition of an additional interest in a property in San Francisco, California.
 
(6)Includes the sale of three assets to TRT DDR Venture I, 56 assets to Domestic Retail Fund, three assets to DDR Macquarie Fund and other shopping center assets and outparcel sales.
 
(7)Includes the formation of the DDRTC Core Retail Fund LLC joint venture and acquisition of an additional 73% interest in Metropole Shopping Center by Sonae Sierra Brazil BV Sarl.
 
(8)Includes the sale of seven shopping centers previously owned by DDR Markaz LLC to Domestic Retail Fund and the sale of vacant land.


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(9)Includes the transfer to the Company from joint ventures (KLA/SM LLC and Salisbury, Maryland), final earnout adjustments for acquisitions, redemption of OP Units and the consolidation of a joint venture asset pursuant to EITF04-05.
 
(10)Includes asset dispositions, the sale of assets formerly owned by the KLA/SM LLC joint venture to Service Holdings LLC, the sale of properties to DDR Macquarie Fund and DDR MDT PS LLC, plus the transfer of newly developed expansion areas adjacent to four shopping centers and the sale of several outparcels.
 
(11)Reflects the DPG Realty Holdings LLC acquisition and adjustments to accounting presentation from previous acquisitions.
 
(12)Includes the acquisition of land in Allen, Texas, and Bloomfield Hills, Michigan, for the development of shopping centers by the Coventry II Fund.
 
(13)Includes asset dispositions, the transfer to DDR of the KLA/SM LLC joint venture assets, five assets located in Phoenix, Arizona (two properties); Pasadena, California; Salisbury, Maryland and Apex, North and Carolina.
 
2009 Activity
 
Current Strategies
 
On February 23, 2009, the Company entered into a stock purchase agreement with Mr. Alexander Otto (the “Investor”) to issue and sell 30 million common shares and warrants to purchase up to 10 million common shares with an exercise price of $6.00 per share (the “Warrants”) to the Investor and certain members of his family (collectively with the Investor, the “Otto Family”) for aggregate gross proceeds of approximately $112.5 million. The transaction, if approved and consummated, as further described below, will occur in two closings, each consisting of 15 million common shares and a warrant to purchase five million common shares, provided that the Investor also has the right to purchase all of the common shares and warrants at one closing. The first closing will occur upon the satisfaction or waiver of certain closing conditions including the approval by the Company’s shareholders of the issuance of the Company’s securities and the second closing will occur within six months of the shareholder approval. Under the terms of the stock purchase agreement, the Company will also issue additional common shares to Mr. Otto in an amount equal to any dividends declared by the Company after February 23, 2009 and prior to the applicable closing to which Mr. Otto would have been entitled had the common shares the Investor is purchasing been outstanding on the record dates for any such dividends.
 
The purchase price for the first 15 million common shares will be $3.50 per share, and the purchase price for the second 15 million common shares will be $4.00 per share, regardless of when purchased and regardless of whether there is one closing or two closings. No separate consideration will be paid by the Investor for the shares issued in respect of dividends. The purchase price for the common shares will be subject to downward adjustment if the weighted average purchase price of all additional common shares (or equivalents thereof) sold by the Company from February 23, 2009 until the applicable closing is less than $2.94 per share (excluding, among other things, common shares payable in connection with any dividends, but including in the calculation all common shares outstanding as of the date of the stock purchase agreement as if issued during such period at $2.94 per share). If the weighted average price for such issuances in the aggregate is less than $2.94, the applicable purchase price will be reduced by an amount equal to the difference between $2.94 and such weighted average price. A five-year warrant for five million shares will be issued for each 15 million common shares purchased by the Investor, for a maximum of 10 million common shares. The warrants have an exercise price of $6.00 per share (subject to downward adjustment pursuant to their terms) and may be exercised on a cashless basis in which we may not receive any consideration upon exercise as the Investor would receive a net amount of shares equivalent to the appreciation in price (if any) of our common stock in excess of $6.00 per share. No separate consideration will be paid for the warrants at closing.
 
Completion of the transactions contemplated by the stock purchase agreement depends upon the satisfaction or waiver of a number of conditions that may be outside of our control, including, but not limited to, the approval of the Company’s shareholders of the securities being issued, the receipt by the Company of additional debt financing and no material adverse change, as defined in the agreement, having occurred. There can be no assurance that we will satisfy all or any of these conditions and, accordingly, there can be no assurance that we will be able to consummate the transaction with the Investor.


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If this transaction is approved by the Company’s shareholders and there is a beneficial owner of 20% or more of the Company’s outstanding common shares as a result of the transaction, a “change in control” will be deemed to have occurred under substantially all of the Company’s equity award plans. It is expected that, in accordance with the equity award plans, all unvested stock options would become fully exercisable and all restrictions on unvested restricted shares would lapse. As such, the Company could record an accelerated non-cash charge in accordance with SFAS 123(R) of approximately $15 million related to these equity awards, of which approximately $10 million would have been expensed in periods following 2009.
 
In response to the unprecedented events that have recently taken place in the capital markets, the Company has refined its strategies in order to mitigate risk and focus on core operating results. The Company’s top priority is to ensure that it is positioned to navigate this current challenging environment and emerge as a stronger company. The Company is taking proactive steps to reduce leverage to protect its long-term financial strength and expects to continue to enhance liquidity, protect the quality of its balance sheet and maximize access to a variety of capital sources.
 
To improve the Company’s liquidity and to lower its leverage in the current economic environment, the Company’s management and Board of Directors determined that it was in the best interests to seek significant additional capital to improve its financial flexibility. The Company’s management and Board of Directors also concluded that in light of a variety of factors, including capital markets volatility, rating agency actions and general economic uncertainties, it was important that any process to raise additional capital be executed promptly and with a high degree of certainty of completion. After exploring and considering potential financing and capital alternatives, the Company’s management and Board of Directors determined that the sale of common shares in this transaction is the most effective alternative to address the Company’s capital needs. As the sale of common shares for this transaction requires shareholder approval, there can be no assurances that the transaction can be completed as contemplated.
 
2008 Activity
 
Strategic Real Estate Transactions
 
DDR Macquarie Fund
 
In 2003, the Company entered into a joint venture with MDT, which is managed by an affiliate of Macquarie Group Limited (ASX: MQG), an international investment bank, advisor and manager of specialized real estate funds, focusing on acquiring ownership interests in institutional-quality community center properties in the United States (“DDR Macquarie Fund”). The Company has been engaged to provide day-to-day operations of the properties and receives fees at prevailing rates for property management, leasing, construction management, acquisitions, due diligence, dispositions (including outparcel dispositions) and financing.
 
In February 2008, the Company began purchasing units of MDT. MDT is DDR’s joint venture partner in the DDR Macquarie Fund. Through the combination of its purchase of the units in MDT (8.3% on a weighted-average basis for the year ended December 31, 2008 and 12.3% as of December 31, 2008) and its 14.5% direct and indirect ownership of the DDR Macquarie Fund, DDR has an approximate 25.0% effective economic interest in the DDR Macquarie Fund as of December 31, 2008. Through December 31, 2008, as described in filings with the Australian Securities Exchange (“ASX Limited”), the Company has purchased an aggregate 115.7 million units of MDT in open market transactions at an aggregate cost of approximately $43.4 million. As the Company’s direct and indirect investments in MDT and the DDR Macquarie Fund gives it the ability to exercise significant influence over operating and financial policies, the Company accounts for both its interest in MDT and the DDR Macquarie Fund using the equity method of accounting.
 
At December 31, 2008, MDT owns an approximate 83% interest, the Company owns an effective 14.5% ownership interest, and MQG effectively owns the remaining 2.5% in the DDR Macquarie Fund portfolio of assets. At December 31, 2008, DDR Macquarie Fund owned 50 operating shopping center properties. MDT is governed by a board of directors that includes three members selected by DDR, three members selected by MQG and three independent members.


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At December 31, 2008, the market price of the MDT shares as traded on the Australian Securities Exchange was $0.04 per share, as compared to $0.25 per share at September 30, 2008. This represents a decline of over 80% in value in the fourth quarter of 2008. Due to the significant decline in the unit value of this investment, as well as the continued deterioration of the global capital markets and the related impact on the real estate market and retail industry, the Company determined that the loss in value was other than temporary pursuant to the provisions of APB 18. Accordingly, the Company recorded an impairment charge of approximately $31.7 million related to this investment reducing its investment in MDT to $4.8 million at December 31, 2008.
 
Developments, Redevelopments and Expansions
 
In the fourth quarter of 2008, the Company reduced its anticipated spending in 2009 for its developments and redevelopments, both for consolidated and unconsolidated projects, as the Company considers this funding to be discretionary spending. One of the important benefits of the Company’s asset class is the ability to phase development projects over time until appropriate leasing levels can be achieved. To maximize the return on capital spending and balance the Company’s de-leveraging strategy, the Company has revised its investment criteria thresholds. The revised underwriting criteria includes a highercash-on-costproject return threshold, a longerlease-upperiod and a higher stabilized vacancy rate. The Company will apply this revised strategy to both its consolidated and certain unconsolidated joint ventures that own assets under development; as the Company has significant influence and, in some cases, approval rights over decisions relating to capital expenditures.
 
Development (Wholly-Owned and Consolidated Joint Ventures)
 
The Company currently has the following wholly-owned and consolidated joint venture shopping center projects under construction:
 
           
     Expected
   
  Owned
  Net Cost
   
Location
 GLA  ($ Millions)  Description
 
Ukiah (Mendocino), California *
  228,943  $66.9  Mixed Use
Guilford, Connecticut
  137,527   48.0  Lifestyle Center
Miami (Homestead), Florida
  272,610   79.7  Community Center
Miami, Florida
  391,351   148.8  Mixed Use
Boise (Nampa), Idaho
  431,689   126.7  Community Center
Boston (Norwood), Massachusetts
  56,343   26.7  Community Center
Boston, Massachusetts (Seabrook, New Hampshire)
  210,855   54.5  Community Center
Elmira (Horseheads), New York
  350,987   55.0  Community Center
Raleigh (Apex), North Carolina (Promenade)
  72,830   16.9  Community Center
Austin (Kyle), Texas *
  443,092   77.2  Community Center
           
Total
  2,596,227  $700.4   
           
 
 
*Consolidated 50% joint venture
 
At December 31, 2008, approximately $472.6 million of costs were incurred in relation to the Company’s 10 wholly-owned and consolidated joint venture development projects under construction.
 
In addition to these current developments, several of which will be phased in, the Company and its joint venture partners intend to commence construction on various other developments only after substantial tenant leasing has occurred, acceptable construction financing is available and equity capital contributions can be funded, including several international projects.


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The wholly-owned and consolidated joint venture development estimated funding schedule, net of reimbursements, as of December 31, 2008, is as follows (in millions):
 
     
Funded as of December 31, 2008
 $472.6 
Projected net funding during 2009
  46.1 
Projected net funding thereafter
  181.7 
     
Total
 $700.4 
     
 
Development (Unconsolidated Joint Ventures)
 
The Company’s unconsolidated joint ventures have the following shopping center projects under construction. At December 31, 2008, approximately $479.7 million of costs had been incurred in relation to these development projects.
 
               
  DDR’s
         
  Effective
     Expected
   
  Ownership
  Owned
  Net Cost
   
Location
 Percentage  GLA  ($ Millions)  Description
 
Kansas City (Merriam), Kansas
  20.0%  158,632  $43.7  Community Center
Detroit (Bloomfield Hills), Michigan
  10.0%  623,782   189.8  Lifestyle Center
Dallas (Allen), Texas
  10.0%  797,665   171.2  Lifestyle Center
Manaus, Brazil
  47.4%  477,630   98.2  Enclosed Mall
               
Total
      2,057,709  $502.9   
               
 
The unconsolidated joint venture development estimated funding schedule, net of reimbursements, as of December 31, 2008, is as follows (in millions):
 
                 
        Anticipated
    
  DDR’s
  JV Partners’
  Proceeds from
    
  Proportionate
  Proportionate
  Construction
    
  Share  Share  Loans  Total 
 
Funded as of December 31, 2008
 $70.8  $173.4  $235.5  $479.7 
Projected net funding during 2009
  13.7   28.9   21.2   63.8 
Projected net funding (reimbursements) thereafter
  (10.0)  (40.2)  9.6   (40.6)
                 
Total
 $74.5  $162.1  $266.3  $502.9 
                 
 
Redevelopments and Expansions (Wholly-Owned and Consolidated Joint Ventures)
 
The Company is currently expanding/redeveloping the following wholly-owned and consolidated joint venture shopping centers at a projected aggregate net cost of approximately $106.9 million. At December 31, 2008, approximately $76.6 million of costs had been incurred in relation to these projects.
 
   
Property
 
Description
 
Miami (Plantation), Florida
 Redevelop shopping center to include Kohl’s and additional junior tenants
Chesterfield, Michigan
 Construct 25,400 sf of small shop space and retail space
Fayetteville, North Carolina
 Redevelop 18,000 sf of small shop space and construct an outparcel building
 
Redevelopments and Expansions (Unconsolidated Joint Ventures)
 
The Company’s unconsolidated joint ventures are currently expanding/redeveloping the following shopping centers at a projected net cost of $154.2 million, which includes original acquisition costs related to assets acquired


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for redevelopment. At December 31, 2008, approximately $116.7 million of costs had been incurred in relation to these projects. The following is a summary of these joint venture redevelopment and expansion projects:
 
       
  DDR’s
   
  Effective
   
  Ownership
   
Property
 Percentage  Description
 
Buena Park, California
  20% Large-scale re-development of enclosed mall to open-air format
Los Angeles (Lancaster), California
  21% Relocate Wal-Mart and redevelop former Wal-Mart space
Benton Harbor, Michigan
  20% Construct 89,000 square feet of anchor space and retail shops
 
Dispositions
 
In 2008, the Company sold the following properties:
 
             
  Company-Owned
       
  Square Feet
  Sales Price
  Net Gain
 
Location
 (Thousands)  (Millions)  (Millions) 
 
Shopping Center Properties
            
Core Portfolio Properties (1)
  981  $111.8  $1,330 
Business Center Properties (2)
  291   20.7   (5,819)
             
   1,272  $132.5  $(4,489)
             
 
 
(1)The Company sold 21 shopping center properties in various states.
 
(2)Represents the sale of a consolidated joint venture asset. The Company’s ownership was 55.84% and the amount reflected above represents the proceeds received by the Company.
 
2007 Activity
 
Strategic Real Estate Transactions
 
Inland Retail Real Estate Trust, Inc.
 
On February 27, 2007, the Company acquired IRRETI through a merger with a subsidiary. The Company acquired all of the outstanding shares of IRRETI for a total merger consideration of $14.00 per share, of which $12.50 per share was funded in cash and $1.50 per share in the form of DDR common shares. As a result, the Company issued 5.7 million of DDR common shares to the IRRETI shareholders with an aggregate value of approximately $394.2 million.
 
The IRRETI merger was initially recorded at a total cost of approximately $6.2 billion. Real estate related assets of approximately $3.1 billion were recorded by the Company and approximately $3.0 billion were recorded by the joint venture with TIAA-CREF (“DDRTC Core Retail Fund LLC”). The IRRETI real estate portfolio consisted of 315 community shopping centers, neighborhood shopping centers and single tenant/net leased retail properties, comprising approximately 35.2 million square feet of total GLA, of which 66 shopping centers comprising approximately 15.6 million square feet of total GLA are in the joint venture with TIAA-CREF. The Company sold 78 assets acquired from IRRETI to third parties throughout 2007.
 
Domestic Retail Fund
 
In June 2007, the Company formed Domestic Retail Fund, a Company sponsored, fully-seeded commingled fund. The Domestic Retail Fund acquired 63 shopping center assets aggregating 8.3 million square feet from the Company and a joint venture of the Company for approximately $1.5 billion. The Domestic Retail Fund is composed of 54 assets acquired by the Company through its acquisition of IRRETI, seven assets formerly held in a joint venture with Kuwait Financial Centre (“DDR Markaz LLC Joint Venture”), in which the Company had a 20%


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ownership interest, and two assets from the Company’s wholly-owned portfolio. The Company recognized a gain of approximately $9.6 million, net of its 20% retained interest, from the sale of the two wholly-owned assets, which is included in gain on disposition of real estate in the Company’s statements of operations. In conjunction with the sale of assets to the Domestic Retail Fund and identification of the equity partners, the Company paid a $7.8 million fee to a third party consulting firm and recognized this amount as a reduction to gain on disposition of real estate. The DDR Markaz LLC Joint Venture recorded a gain of approximately $89.9 million. The Company’s proportionate share of approximately $18.0 million of the joint venture gain was deferred, as the Company retained an effective 20% ownership interest in these assets. The Company has been engaged by the Domestic Retail Fund to performday-to-dayoperations of the properties and receives ongoing fees for asset management and property management, leasing, construction management and ancillary income in addition to a promoted interest. In addition, upon the sale of the assets from the DDR Markaz LLC Joint Venture to the Domestic Retail Fund, the Company recognized promoted income of approximately $13.6 million, which was included in equity in net income of joint ventures and FFO.
 
TRT DDR Venture I
 
In May 2007, the Company formed a $161.5 million joint venture (“TRT DDR Venture I”). The Company contributed three recently developed assets aggregating 0.7 million of Company-owned square feet to the joint venture and retained an effective ownership interest of 10%. The Company recorded an after-tax merchant building gain, net of its retained interest, of approximately $45.7 million, which was included in gain on disposition of real estate and FFO. The Company receives ongoing asset management and property management fees, plus fees on leasing and ancillary income, in addition to a promoted interest.
 
ECE Projektmanagement Joint Venture
 
In May 2007, ECE Projektmanagement G.m.b.H & Co. KG (“ECE”), a fully integrated international developer and manager of shopping centers based in Hamburg, Germany, and the Company formed a new joint venture (“ECE Joint Venture”) to fund investments in retail developments located in western Russia and Ukraine. The joint venture is owned 75% by the Company and 25% by ECE of which the Investor is currently the Chairman of the Executive Board. This joint venture is consolidated by the Company. The Company intends to commence construction on various developments only after substantial tenant leasing has occurred and construction financing is available, including these projects and the Company can meet its capital obligations. While there are no assurances any of these proposed development projects will be undertaken, they provide a source of potential development projects over the next several years.
 
DDR Macquarie Fund
 
During August and September 2007, the Company contributed three shopping center properties, aggregating 0.5 million square feet, to DDR Macquarie Fund. The aggregate purchase price for the properties was $49.8 million. The assets were recently acquired by the Company as part of its acquisition of IRRETI, and, as a result, the Company did not record a gain on the transaction.
 
Acquisitions
 
In 2007, the Company acquired the following shopping center assets:
 
         
  Company-Owned
  Gross
 
  Square Feet
  Purchase Price
 
Location
 (Thousands)  (Millions) 
 
IRRETI merger (see 2007 Strategic Real Estate Transactions)
  17,273  $3,054.4 
Coventry I (1)
  —   13.8 
San Antonio, Texas (2)
  207   16.9 
         
   17,480  $3,085.1 
         


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(1)Reflects the Company’s purchase price associated with the acquisition of its partner’s approximate 25% ownership interest.
 
(2)The Company purchased a 50% equity interest through its investment in this joint venture. This asset is consolidated into the Company in accordance with FIN 46.
 
In 2007, the Company’s unconsolidated joint ventures acquired the following shopping center properties, excluding those assets purchased from the Company or its unconsolidated joint ventures:
 
         
  Company-
  Gross
 
  Owned
  Purchase
 
  Square Feet
  Price
 
Location
 (Thousands)  (Millions) 
 
DDR — SAU Retail Fund LLC (1)
  2,277  $30.4 
DDRTC Core Retail Fund LLC (2)
  15,638   2,998.6 
Homestead, Pennsylvania (3)
  99   5.4 
Lyndhurst, New Jersey (4)
  78   20.9 
Sao Bernardo Do Campo, Brazil (5)
  —   24.6 
         
   18,092  $3,079.9 
         
 
 
(1)The Company acquired a 20% equity interest in this joint venture, consisting of 28 properties in nine states. The Company’s equity interest in these properties was acquired as part of the IRRETI merger (see 2007 Strategic Real Estate Transactions).
 
(2)The Company purchased a 15% equity interest in this joint venture, consisting of 66 properties in 14 states. This investment was acquired as part of the IRRETI merger (see 2007 Strategic Real Estate Transactions).
 
(3)The DDRTC Core Retail Fund LLC joint venture acquired one shopping center asset.
 
(4)The DDR — SAU Retail Fund LLC joint venture acquired one shopping center asset.
 
(5)Reflects the Company’s purchase price associated with the acquisition of its partner’s 73% ownership interest.
 
Development, Redevelopment & Expansions
 
As of December 31, 2007, the Company had substantially completed the construction of the Chicago (McHenry), IL and San Antonio (Stone Oak), TX shopping centers, at an aggregate net cost of $151.2 million.
 
During the year ended December 31, 2007, the Company completed expansions and redevelopment projects located in Hamilton, NJ and Ft. Union, UT at an aggregate net cost of $32.7 million. During the year ended December 31, 2007, the Company’s unconsolidated joint ventures completed an expansion and redevelopment project located in Phoenix, AZ at an aggregate net cost of $21.9 million.
 
Dispositions
 
In 2007, the Company sold the following properties:
 
             
  Company-Owned
       
  Square Feet
  Sales Price
  Net Gain
 
Location
 (Thousands)  (Millions)  (Millions) 
 
Core Portfolio Properties (1)
  6,301  $589.4  $12.3 
Transfer to Unconsolidated Joint Venture Interests
            
Domestic Retail Fund (2)
  8,342   1,201.3   1.8 
TRT DDR Venture I (3)
  682   161.5   50.3 
DDR Macquarie Fund (4)
  515   49.8   — 
             
   15,840  $2,002.0  $64.4 
             
 
 
(1)The Company sold 67 shopping center properties in various states.


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(2)The Company contributed 54 assets acquired through the acquisition of IRRETI and two assets from the Company’s wholly-owned portfolio to the joint venture. The Company retained a 20% effective interest in these assets. The amount includes 100% of the selling price; the Company eliminated the portion of the gain associated with its 20% ownership interest (see 2007 Strategic Real Estate Transactions).
 
(3)The Company contributed three wholly-owned assets to the joint venture. The Company retained an effective 10% ownership interest in these assets. The amount includes 100% of the selling price; the Company deferred the portion of the gain associated with its 10% ownership interest (see 2007 Strategic Real Estate Transactions).
 
(4)The Company contributed three wholly-owned assets to the joint venture. The Company retained an effective 14.5% ownership interest in these assets. The amount includes 100% of the selling price. The Company did not record a gain on the contribution of these assets, as they had been recently acquired through the merger with IRRETI.
 
In 2007, the Company’s unconsolidated joint ventures sold the following properties, excluding those purchased by other unconsolidated joint venture interests:
 
                 
           Company’s
 
  Company’s
        Proportionate
 
  Effective
  Company-Owned
     Share of
 
  Ownership
  Square Feet
  Sales Price
  Gain
 
Location
 Percentage  (Thousands)  (Millions)  (Millions) 
 
Overland Park, Kansas
  25.50%  61.0  $8.2  $0.3 
Service Merchandise (6 sites)
  20.00%  356.4   27.2   1.3 
                 
       417.4  $35.4  $1.6 
                 
 
In addition to the gains reflected above, in 2007 the Company received $13.6 million of promoted income relating to the sale of assets from DDR Markaz LLC to Domestic Retail Fund, which is included in the Company’s proportionate share of net income.
 
2006 Activity
 
Strategic Real Estate Transactions
 
Sonae Sierra Brazil BV Sarl
 
In October 2006, the Company acquired a 50% joint venture interest in Sonae Sierra Brazil BV Sarl, a fully integrated retail real estate company based in Sao Paulo, Brazil, for approximately $147.5 million. The Company’s partner in Sonae Sierra Brazil BV Sarl is Sonae Sierra, an international owner, developer and manager of shopping centers based in Portugal. Sonae Sierra Brazil BV Sarl is the managing partner of a partnership that owns direct and indirect interests in nine retail assets aggregating 3.6 million square feet and a property management company in Sao Paulo, Brazil, that oversees the leasing and management operations of the portfolio and the development of new shopping centers. Sonae Sierra Brazil BV Sarl owned approximately 95% of the partnership and Enplanta Engenharia, a third party, owned approximately 5%.
 
DDR MDT PS LLC
 
During June 2006, the Company sold six properties, aggregating 0.8 million owned square feet, to a newly formed joint venture (“DDR MDT PS LLC”) with MDT for approximately $122.7 million and recognized gains totaling approximately $38.9 million, of which $32.8 million represented merchant building gains from recently developed shopping centers.
 
The Company has been engaged to perform allday-to-dayoperations of the properties and earnsand/or may be entitled to receive ongoing fees for property management, leasing and construction management, in addition to a promoted interest, along with other periodic fees such as financing fees.
 
DDR Macquarie Fund
 
In 2006, the Company sold four additional expansion areas in McDonough, Georgia; Coon Rapids, Minnesota; Birmingham, Alabama and Monaca, Pennsylvania to DDR Macquarie Fund for approximately $24.7 million.


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These expansion areas are adjacent to shopping centers currently owned by the joint venture. The Company recognized an aggregate merchant build gain of $9.2 million and deferred gains of approximately $1.6 million relating to the Company’s effective 14.5% ownership interest in the venture.
 
Coventry II Fund
 
The Coventry II Fund was formed with several institutional investors and Coventry Real Estate Advisors (“CREA”) as the investment manager (“Coventry II Fund”). Neither the Company nor any of its officers owns a common equity interest in the Coventry II Fund or has any incentive compensation tied to this fund. The Coventry II Fund’s strategy is to invest in a variety of retail properties that present opportunities for value creation, such as re-tenanting, market repositioning, redevelopment or expansion. The Coventry II Fund and the Company, through a joint venture, acquired 11 value-added retail properties and sites formerly occupied by Service Merchandise in the United States. The Company will not acquire additional assets through the Coventry II Fund, but may continue to advance funds associated with those projects undergoing development or redevelopment activities (see Off-Balance Sheet Arrangements).
 
The Company co-invested approximately 20% in each joint venture and is generally responsible forday-to-daymanagement of the properties. Pursuant to the terms of the joint venture, the Company may earn fees for property management, leasing and construction management. The Company also could earn a promoted interest, along with CREA, above a preferred return after return of capital to fund investors.
 
Service Merchandise Joint Venture
 
In March 2002, the Company entered into a joint venture with Lubert-Adler Real Estate Funds and Klaff Realty, L.P. (the “KLA/SM LLC”) that was awarded asset designation rights for all of the retail real estate interests of the bankrupt estate of Service Merchandise Corporation. The Company had an approximate 25% interest in the joint venture.
 
In August 2006, the Company purchased its then partners’ approximate 75% interest in the remaining 52 assets formerly occupied by Service Merchandise, owned by the KLA/SM LLC joint venture, at a gross purchase price of approximately $138 million relating to the partners’ ownership, based on a total valuation of approximately $185 million for all remaining assets, including outstanding indebtedness. In September 2006, the Company sold 51 of the assets formerly occupied by Service Merchandise to the Coventry II Fund, as discussed above. The Company retained a 20% interest in the joint venture. The Company recorded a gain of approximately $6.1 million, of which $3.2 million was included in FFO.
 
Acquisitions
 
In 2006, the Company acquired the following shopping center assets:
 
         
  Company-
    
  Owned
  Gross Purchase
 
  Square Feet
  Price
 
Location
 (Thousands)  (Millions) 
 
Phoenix, Arizona (1)
  197  $15.6 
Pasadena, California (2)
  557   55.9 
Valencia, California
  76   12.4 
Salisbury, Maryland (1)
  126   1.5 
Apex, North Carolina (3)
  324   4.4 
San Antonio, Texas (4)
  Development Asset   22.4 
         
   1,280  $112.2 
         
 
 
(1)Reflects the Company’s purchase price, net of debt assumed, associated with the acquisition of its partner’s 50% ownership interest.


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(2)Reflects the Company’s purchase price, net of prepayment of debt, associated with the acquisition of its partner’s 75% ownership interest.
 
(3)Reflects the Company’s purchase price associated with the acquisition of its partner’s 80% and 20% ownership interests in two separate phases, respectively.
 
(4)Reflects the Company’s purchase price associated with the acquisition of its partner’s 50% ownership interest.
 
In 2006, the Company’s unconsolidated joint ventures acquired the following shopping center properties, not including those assets purchased from the Company or its unconsolidated joint ventures:
 
         
  Company-
    
  Owned
    
  Square Feet
  Gross Purchase
 
Location
 (Thousands)  Price (Millions) 
 
San Diego, California (1)
  74  $11.0 
Orland Park, Illinois (2)
  58   12.2 
Benton Harbor, Michigan (3)
  223   27.1 
Bloomfield Hills, Michigan (2)
  Development Asset   68.4 
Cincinnati, Ohio (4)
  668   194.4 
Allen, Texas (2)
  Development Asset   10.9 
Sonae Sierra Brazil BV Sarl (5)
  3,469   180.3 
         
   4,492  $504.3 
         
 
 
(1)The Company purchased a 50% equity interest through its investment in the DDR MDT MV LLC (“MV LLC”).
 
(2)The Company purchased a 10% equity interest through its investment in the Coventry II Fund.
 
(3)The Company purchased a 20% equity interest through its investment in the Coventry II Fund. There is approximately 89,000 sq. ft. under redevelopment.
 
(4)The Company purchased an 18% equity interest through its investment in the Coventry II Fund. There is approximately 160,000 sq. ft. under redevelopment.
 
(5)The Company purchased an initial 50% interest in an entity which owned a 93% interest in nine properties located in Sao Paulo, Brazil.
 
Development, Redevelopments & Expansions
 
As of December 31, 2006, the Company had substantially completed the construction of the Freehold, New Jersey; Apex, North Carolina (Beaver Creek Crossings — Phase I) and Pittsburgh, Pennsylvania, shopping centers, at an aggregate gross cost of $156.7 million.
 
During the year ended December 31, 2006, the Company completed eight expansions and redevelopment projects located in Birmingham, Alabama; Lakeland, Florida; Ocala, Florida; Stockbridge, Georgia; Rome, New York; Mooresville, North Carolina; Bayamon, Puerto Rico (Rio Hondo) and Ft. Union, Utah, at an aggregate gross cost of $73.4 million.
 
Dispositions
 
In 2006, the Company sold the following properties:
 
             
  Company-Owned
       
  Square Feet
  Sales Price
  Net Gain
 
Location
 (Thousands)  (Millions)  (Millions) 
 
Core Portfolio Properties (1)
  822  $54.8  $11.1 
Transfer to Unconsolidated Joint Venture Interests
            
DDR Macquarie Fund (2)
  1,024   24.7   9.2 
DDR MDT PS LLC (3)
  644   122.7   38.9 
             
   2,490  $202.2  $59.2 
             


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(1)The Company sold six shopping center properties located in three states.
 
(2)The Company contributed four newly developed expansion areas adjacent to shopping centers currently owned by DDR Macquarie Fund. The Company retained a 14.5% effective interest in these assets. The amount includes 100% of the selling price; the Company eliminated the portion of the gain associated with its 14.5% ownership interest (see 2006 Strategic Real Estate Transactions).
 
(3)The Company contributed six wholly-owned assets to the joint venture. The Company did not retain an ownership interest in the joint venture, but maintained a promoted interest. The amount includes 100% of the selling price (see 2006 Strategic Real Estate Transactions).
 
In 2006, the Company’s unconsolidated joint ventures sold the following shopping center properties, excluding the properties purchased by the Company as described above:
 
                 
           Company’s
 
           Proportionate
 
  Company’s Effective
  Company-Owned
     Share of
 
  Ownership
  Square Feet
  Sales Price
  Gain (loss)
 
Location
 Percentage  (Thousands)  (Millions)  (Millions) 
 
Olathe, Kansas; Shawnee, Kansas and Kansas City, Missouri
  25.50%  432  $20.0  $(0.5)
Fort Worth, Texas
  50.00%  235   22.0   0.2 
Everett, Washington
  20.75%  41   8.1   1.2 
Kildeer, Illinois
  10.00%  162   47.3   7.3(1)
Service Merchandise Site
  24.63%  52   3.2   — 
Service Merchandise Site
  20.00%  —   1.4   — 
                 
       922  $102.0  $8.2 
                 
 
 
(1)Includes promoted income.
 
OFF-BALANCE SHEET ARRANGEMENTS
 
The Company has a number of off balance sheet joint ventures and other unconsolidated entities with varying economic structures. Through these interests, the Company has investments in operating properties, development properties and two management and development companies. Such arrangements are generally with institutional investors and various developers located throughout the United States.
 
The unconsolidated joint ventures that have total assets greater than $250 million (based on the historical cost of acquisition by the unconsolidated joint venture) are as follows:
 
               
  Effective
    Company-Owned
    
Unconsolidated
 Ownership
    Square Feet
  Total Debt
 
Real Estate Ventures
 Percentage (1)  Assets Owned (Thousands)  (Millions) 
 
Sonae Sierra Brazil BV Sarl
  47.4% Nine shopping centers, one shopping center under development and a management company in Brazil  3,510  $57.3 
Domestic Retail Fund 
  20.0  63 shopping center assets in several states  8,250   967.8 
DDR — SAU Retail Fund LLC
  20.0  29 shopping center assets located in several states  2,375   226.2 
DDRTC Core Retail Fund LLC
  15.0  66 assets in several states  15,747   1,771.0 
DDR Macquarie Fund
  25.0  50 shopping centers in several states  12,077   1,236.7 


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(1)Ownership may be held through different investment structures. Percentage ownerships are subject to change, as certain investments contain promoted structures.
 
In connection with the development of shopping centers owned by certain affiliates, the Companyand/or its equity affiliates have agreed to fund the required capital associated with approved development projects aggregating approximately $63.3 million at December 31, 2008. These obligations, comprised principally of construction contracts, are generally due in 12 to 18 months as the related construction costs are incurred and are expected to be financed through new or existing construction loans, revolving credit facilities and retained capital.
 
The Company has provided loans and advances to certain unconsolidated entitiesand/orrelated partners in the amount of $4.1 million at December 31, 2008, for which the Company’s joint venture partners have not funded their proportionate share. In addition to these loans, the Company has advanced $58.1 million of financing to one of its unconsolidated joint ventures, which accrues interest at the greater of LIBOR plus 700 basis points or 12% and has an initial maturity of July 2011. These entities are current on all debt service owed to DDR. The Company guaranteed base rental income from one to three years at certain centers held through Service Holdings LLC, aggregating $3.0 million at December 31, 2008. The Company has not recorded a liability for the guarantee, as the subtenants of Service Holdings LLC are paying rent as due. The Company has recourse against the other parties in the joint venture for their pro rata share of any liability under this guarantee.
 
The Coventry II Fund and the Company, through a joint venture, acquired 11 value-added retail properties and owns 44 sites formerly occupied by Service Merchandise in the United States. The Company co-invested approximately 20% in each joint venture and is generally responsible forday-to-daymanagement of the properties. Pursuant to the terms of the joint venture, the Company earns fees for property management, leasing and construction management. The Company also could earn a promoted interest, along with CREA, above a preferred return after return of capital to fund investors.
 
As of December 31, 2008, the aggregate amount of the Company’s net investment in the Coventry II joint ventures is $72.0 million. As discussed above, the Company has also advanced $58.1 million of financing to one of the Coventry II joint ventures. In addition to its existing equity and note receivable, the Company has provided payment guaranties to third-party lenders in connection with financing for seven of the projects. The amount of each such guaranty is not greater than the proportion to the Company’s investment percentage in the underlying project, and the aggregate amount of the Company’s guaranties is approximately $35.3 million.
 
Although the Company will not acquire additional assets through the Coventry II Fund, additional funds are required to address ongoing operational needs and costs associated with those projects undergoing development or redevelopment. The Coventry II Fund is exploring a variety of strategies to obtain such funds, including potential dispositions, financings and additional investments by the existing investors.
 
Three of the Coventry II Fund’s third-party credit facilities have matured. For the Bloomfield Hills, Michigan project, a $48.0 million land loan matured on December 31, 2008 and on February 24, 2009, the lender sent to the borrower a formal notice of default (the Company provided a payment guaranty in the amount of $9.6 million with respect to such loan). The above referenced $58.1 million Company loan relating to the Bloomfield Hills, Michigan project is cross defaulted with this third party loan. For the Kansas City, Missouri project, a $35.0 million loan matured on January 2, 2009, and on January 6, 2009, the lender sent to the borrower a formal notice of default (the Company did not provide a payment guaranty with respect to such loan). For the Merriam, Kansas project, a $17.0 million land loan matured on January 20, 2009, and on February 17, 2009, the lender sent to the borrower a formal notice of default (the Company provided a payment guaranty in the amount of $2.2 million with respect to such loan). The Coventry II Fund is exploring a variety of strategies to pay-down, extend or refinance the outstanding obligations.
 
As a result of the IRRETI merger, the Company assumed certain environmental and non-recourse obligations of DDR-SAU Retail Fund LLC pursuant to eight guaranty and environmental indemnity agreements. The Company’s guaranty is capped at $43.1 million in the aggregate except for certain events, such as fraud, intentional misrepresentation or misappropriation of funds.


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The Company is involved with overseeing the development activities for several of its unconsolidated joint ventures that are constructing, redeveloping or expanding shopping centers. The Company earns a fee for its services commensurate with the level of oversight provided. The Company generally provides a completion guarantee to the third party lending institution(s) providing construction financing.
 
The Company’s unconsolidated joint ventures have aggregate outstanding indebtedness to third parties of approximately $5.8 billion and $5.6 billion at December 31, 2008 and 2007, respectively (see Item 7A. Quantitative and Qualitative Disclosures About Market Risk). Such mortgages and construction loans are generally non-recourse to the Company and its partners; however, certain mortgages may have recourse to the Company and its partners in certain limited situations, such as misuse of funds and material misrepresentations. In connection with certain of the Company’s unconsolidated joint ventures, the Company agreed to fund any amounts due the joint venture’s lender if such amounts are not paid by the joint venture based on the Company’s pro rata share of such amount aggregating $40.2 million at December 31, 2008.
 
The Company entered into an unconsolidated joint venture that owns real estate assets in Brazil and has generally chosen not to mitigate any of the residual foreign currency risk through the use of hedging instruments for this entity. The Company will continue to monitor and evaluate this risk and may enter into hedging agreements at a later date.
 
The Company entered into consolidated joint ventures that own real estate assets in Canada and Russia. The net assets of these subsidiaries are exposed to volatility in currency exchange rates. As such, the Company uses nonderivative financial instruments to hedge this exposure. The Company manages currency exposure related to the net assets of the Company’s Canadian and European subsidiaries primarily through foreign currency-denominated debt agreements that the Company enters into. Gains and losses in the parent company’s net investments in its subsidiaries are economically offset by losses and gains in the parent company’s foreign currency-denominated debt obligations.
 
For the year ended December 31, 2008, $25.5 million of net losses related to the foreign currency-denominated debt agreements was included in the Company’s cumulative translation adjustment. As the notional amount of the nonderivative instrument substantially matches the portion of the net investment designated as being hedged and the nonderivative instrument is denominated in the functional currency of the hedged net investment, the hedge ineffectiveness recognized in earnings was not material.
 
FINANCING ACTIVITIES
 
The Company has historically accessed capital sources through both the public and private markets. The Company’s acquisitions, developments, redevelopments and expansions are generally financed through cash provided from operating activities, revolving credit facilities, mortgages assumed, construction loans, secured debt, unsecured public debt, common and preferred equity offerings, joint venture capital, preferred OP Units and asset sales. Total debt outstanding at December 31, 2008, was approximately $5.9 billion, as compared to approximately $5.6 billion and $4.2 billion at December 31, 2007 and 2006, respectively.
 
The volatility in the debt markets during 2008 has caused borrowing spreads over treasury rates to reach higher levels than previously experienced. This uncertainty re-emphasizes the need to access diverse sources of capital, maintain liquidity and stage debt maturities carefully. Most significantly, it underscores the importance of a conservative balance sheet that provides flexibility in accessing capital and enhances the Company’s ability to manage assets with limited restrictions. A conservative balance sheet would allow the Company to be opportunistic in its investment strategy and in accessing the most efficient and lowest cost financing available.


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Financings through the issuance of common shares, preferred shares, construction loans, medium term notes, convertible notes, term loans and preferred OP Units (units issued by the Company’s partnerships) aggregated $5.1 billion during the three years ended December 31, 2008, and are summarized as follows (in millions):
 
             
  2008  2007  2006 
 
Equity:
            
Common shares
 $41.9(1) $1,140.8(2) $— 
Preferred OP Units
  —   484.2(3)  — 
             
Total equity
  41.9   1,625.0   — 
Debt:
            
Construction
  116.9   104.3   11.1 
Permanent financing
  350.0   30.0   — 
Mortgage debt assumed
  17.5   446.5   132.3 
Convertible notes
  —   600.0(4)  250.0(7)
Unsecured term loan
  —   750.0(5)  — 
Secured term loan
  —   400.0(6)  180.0(6)
             
Total debt
  484.4   2,330.8   573.4 
             
  $526.3  $3,955.8  $573.4 
             
 
 
(1)The Company issued 8.3 million shares for approximately $41.9 million in December 2008.
 
(2)Approximately 5.7 million shares, aggregating approximately $394.2 million, were issued to IRRETI shareholders in February 2007. The Company issued 11.6 million common shares in February 2007 for approximately $746.6 million upon the settlement of the forward sale agreements entered into in December 2006.
 
(3)Issuance of 20 million preferred OP Units with a liquidation preference of $25 per unit, aggregating $500 million of the net assets of the Company’s consolidated subsidiary in February 2007. In accordance with the terms of the agreement, the preferred OP Units were redeemed at 97.0% of par in June 2007.
 
(4)Issuance of 3.00% convertible senior unsecured notes due 2012. The notes have an initial conversion rate of approximately 13.3783 common shares per $1,000 principal amount of the notes, which represents an initial conversion price of approximately $74.75 per common share and a conversion premium of approximately 20.0% based on the last reported sale price of $62.29 per common share on March 7, 2007. The initial conversion rate is subject to adjustment under certain circumstances. Upon closing of the sale of the notes, the Company repurchased $117.0 million of its common shares. In connection with the offering, the Company entered into an option agreement, settled in the Company’s common shares, with an investment bank that had the economic impact of effectively increasing the initial conversion price of the notes to $87.21 per common share, which represents a 40% premium based on the March 7, 2007 closing price of $62.29 per common share. The cost of this arrangement was approximately $32.6 million and has been recorded as an equity transaction in the Company’s consolidated balance sheet.
 
(5)This facility bore interest at LIBOR plus 0.75% and was repaid in June 2007.
 
(6)This facility bears interest at LIBOR plus 0.70% and matures in February 2011. This facility allows for a one-year extension option.
 
(7)Issuance of 3.50% convertible senior unsecured notes due 2011. The notes have an initial conversion rate of approximately 15.3589 common shares per $1,000 principal amount of the notes, which represents an initial conversion price of approximately $65.11 per common share and a conversion premium of approximately 22.5% based on the last reported sale price of $53.15 per common share on August 22, 2006. The initial conversion rate is subject to adjustment under certain circumstances. Upon closing of the sale of the notes, the Company repurchased $48.3 million of its common shares. In connection with the offering, the Company entered into an option arrangement, settled in the Company’s common shares, with an investment bank that had the economic impact of effectively increasing the initial conversion price of the notes to $74.41 per common share, which represents a 40.0% premium based on the August 22, 2006 closing price of $53.15 per common share. The cost of this arrangement was approximately $10.3 million and has been recorded as an equity transaction in the Company’s consolidated balance sheet.


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CAPITALIZATION
 
At December 31, 2008, the Company’s capitalization consisted of $5.9 billion of debt, $555 million of preferred shares and $0.6 billion of market equity (market equity is defined as common shares and OP Units outstanding multiplied by $4.88, the closing price of the common shares on the New York Stock Exchange at December 31, 2008), resulting in a debt to total market capitalization ratio of 0.83 to 1.0, as compared to the ratios of 0.52 to 1.0 and 0.36 to 1.0, at December 31, 2007 and 2006, respectively. The closing price of the common shares on the New York Stock Exchange was $38.29 and $62.95 at December 31, 2007 and 2006, respectively. At December 31, 2008, the Company’s total debt consisted of $4.4 billion of fixed-rate debt and $1.5 billion of variable-rate debt, including $600 million of variable-rate debt that had been effectively swapped to a fixed rate through the use of interest rate derivative contracts. At December 31, 2007, the Company’s total debt consisted of $4.5 billion of fixed-rate debt and $1.1 billion of variable-rate debt, including $600 million of variable-rate debt that had been effectively swapped to a fixed rate through the use of interest rate derivative contracts.
 
It is management’s current strategy to have access to the capital resources necessary to manage its balance sheet, to repay upcoming maturities and to consider making prudent investments should such opportunities arise. Accordingly, the Company may seek to obtain funds through additional debt or equity financingsand/or joint venture capital in a manner consistent with its intention to operate with a conservative debt capitalization policy and maintain investment grade ratings with Moody’s Investors Service and Standard and Poor’s. The security rating is not a recommendation to buy, sell or hold securities, as it may be subject to revision or withdrawal at any time by the rating organization. Each rating should be evaluated independently of any other rating. In light of the current economic conditions, the Company may not be able to obtain financing on favorable terms, or at all, which may negatively impact future ratings. In October 2008, one of the Company’s rating agencies reduced the Company’s debt ratings.
 
The Company’s credit facilities and the indentures under which the Company’s senior and subordinated unsecured indebtedness is, or may be, issued contain certain financial and operating covenants, including, among other things, debt service coverage and fixed charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets and engage in mergers and certain acquisitions. Although the Company intends to operate in compliance with these covenants, if the Company were to violate these covenants, the Company may be subject to higher finance costs and fees or accelerated maturities. In addition, certain of the Company’s credit facilities and indentures may permit the acceleration of maturity in the event certain other debt of the Company has been accelerated. Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would have a negative impact on the Company’s financial condition and results of operations.
 
CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS
 
The Company has debt obligations relating to its revolving credit facilities, term loan, fixed-rate senior notes and mortgages payable with maturities ranging from one to 25 years. In addition, the Company has non-cancelable operating leases, principally for office space and ground leases.
 
These obligations are summarized as follows for the subsequent five years ending December 31 (in thousands):
 
         
     Operating
 
Year
 Debt  Leases 
 
2009
 $399,685  $5,317 
2010
  1,983,887   5,008 
2011
  1,609,142   4,947 
2012
  1,041,529   4,493 
2013
  432,348   4,017 
Thereafter
  450,773   141,652 
         
  $5,917,364  $165,434 
         


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At December 31, 2008, the Company had letters of credit outstanding of approximately $77.2 million. The Company has not recorded any obligation associated with these letters of credit. The majority of the letters of credit are collateral for existing indebtedness and other obligations of the Company.
 
In conjunction with the development of shopping centers, the Company has entered into commitments aggregating approximately $111.4 million with general contractors for its wholly-owned and consolidated joint venture properties at December 31, 2008. These obligations, comprised principally of construction contracts, are generally due in 12 to 18 months as the related construction costs are incurred and are expected to be financed through operating cash flowand/or new or existing construction loans or revolving credit facilities.
 
In connection with the transfer of one of the properties to the DDR Macquarie Fund in 2003, the Company deferred the recognition of approximately $2.3 million of the gain on disposition of real estate related to a shortfall agreement guarantee maintained by the Company. DDR Macquarie Fund is obligated to fund any shortfall amount caused by the failure of the landlord or tenant to pay taxes on the shopping center when due and payable. The Company is obligated to pay any shortfall to the extent that it is not caused by the failure of the landlord or tenant to pay taxes on the shopping center when due and payable. No shortfall payments have been made on this property since the completion of construction in 1997.
 
The Company entered into master lease agreements from 2004 through 2007 in connection with the transfer of properties to certain unconsolidated joint ventures that are recorded as a liability and reduction of its related gain. The Company is responsible for the monthly base rent, all operating and maintenance expenses and certain tenant improvements and leasing commissions for units not yet leased at closing for a three-year period. At December 31, 2008, the Company’s master lease obligations, included in accounts payable and other expenses, in the following amounts, were incurred with the properties transferred to the following unconsolidated joint ventures (in millions):
 
     
DDR Markaz II
 $0.1 
DDR MDT PS LLC
  0.3 
TRT DDR Venture I
  0.5 
     
  $0.9 
     
 
Related to one of the Company’s developments in Long Beach, California, the Company guaranteed the payment of any special taxes levied on the property within the City of Long Beach Community Facilities District No. 6 and attributable to the payment of debt service on the bonds for periods prior to the completion of certain improvements related to this project. In addition, an affiliate of the Company has agreed to make an annual payment of approximately $0.6 million to defray a portion of the operating expenses of a parking garage through the earlier of October 2032 or the date when the city’s parking garage bonds are repaid. There are no assets held as collateral or liabilities recorded related to these obligations.
 
The Company has guaranteed certain special assessment and revenue bonds issued by the Midtown Miami Community Development District. The bond proceeds were used to finance certain infrastructure and parking facility improvements. As of December 31, 2008, the remaining debt service obligation guaranteed by the Company was $10.6 million. In the event of a debt service shortfall, the Company is responsible for satisfying the shortfall. There are no assets held as collateral or liabilities recorded related to these guarantees. To date, tax revenues have exceeded the debt service payments for these bonds.
 
The Company routinely enters into contracts for the maintenance of its properties, which typically can be cancelled upon 30 to 60 days notice without penalty. At December 31, 2008, the Company had purchase order obligations, typically payable within one year, aggregating approximately $4.6 million related to the maintenance of its properties and general and administrative expenses.
 
The Company has entered into employment contracts with certain executive officers. These contracts generally provide for base salary, bonuses based on factors including the financial performance of the Company and personal performance, participation in the Company’s equity plans, reimbursement of various expenses, and health and welfare benefits, and may also provide for certain perquisites (which may include automobile expenses, insurance coverage, country or social club expenses,and/orpersonal aircraft use). The contracts for the Company’s Chairman and Chief Executive Officer and President and Chief Operating Officer contain a two-year “evergreen” term that can be


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terminated by giving notice at least 30 days prior to a new extension of the term. The contracts for the other executive officers contain a one-year “evergreen” term and are subject to cancellation without cause upon at least 90 days notice.
 
The Company continually monitors its obligations and commitments. There have been no other material items entered into by the Company since December 31, 2003, through December 31, 2008, other than as described above. See discussion of commitments relating to the Company’s joint ventures and other unconsolidated arrangements in “Off Balance Sheet Arrangements.”
 
INFLATION
 
Substantially all of the Company’s long-term leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling the Company to receive additional rental income from escalation clauses that generally increase rental rates during the terms of the leasesand/orpercentage rentals based on tenants’ gross sales. Such escalations are determined by negotiation, increases in the consumer price index or similar inflation indices. In addition, many of the Company’s leases are for terms of less than 10 years, permitting the Company to seek increased rents at market rates upon renewal. Most of the Company’s leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation.
 
ECONOMIC CONDITIONS
 
The retail market in the United States significantly weakened in 2008 and continues to be challenged in early 2009. Consumer spending has declined in response to erosion in housing values and stock market investments, more stringent lending practices and job losses. Retail sales have declined and tenants have become more selective in new store openings. Some retailers have closed existing locations and as a result, the Company has experienced a loss in occupancy. The reduced occupancy will likely have a negative impact on the Company’s consolidated cash flows, results of operations and financial position in 2009. Offsetting some of the current challenges within the retail environment, the Company has a low occupancy cost relative to other retail formats and historic averages as well as a diversified tenant base with only one tenant exceeding 2.5% of total 2008 consolidated revenues (Wal-Mart at 4.5%). Other significant tenants include Target, Lowe’s Home Improvement, Home Depot, Kohl’s, T.J. Maxx/Marshalls, Publix Supermarkets, PetSmart and Bed Bath & Beyond, all which have relatively strong credit ratings, remain well-capitalized, and have outperformed other retail categories on a relative basis. The Company believes these tenants should continue providing us with a stable ongoing revenue base for the foreseeable future given the long-term nature of these leases. Moreover, the majority of the tenants in the Company’s shopping centers provideday-to-dayconsumer necessities versus high priced discretionary luxury items with a focus towards value and convenience, which the Company believes will enable many of the tenants to continue operating within this challenging economic environment.
 
The Company monitors potential credit issues of its tenants, and analyzes the possible effects to the financial statements of the Company and its unconsolidated joint ventures. In addition to the collectibility assessment of outstanding accounts receivable, the Company evaluates the related real estate for recoverability pursuant to the provisions of SFAS 144, as well as any tenant related deferred charges for recoverability, which may include straight-line rents, deferred lease costs, tenant improvements, tenant inducements and intangible assets (“Tenant Related Deferred Charges”). The Company has evaluated its exposure relating to tenants in financial distress (e.g., the bankruptcy cases filed by Mervyns, Circuit City, Linens N’ Things, Goody’s and Steve & Barry’s). Where appropriate, the Company has either written off the unamortized balance or accelerated depreciation and amortization expense associated with the Tenant Related Deferred Charges. The Company does not believe its exposure associated with past due accounts receivable for these tenants, net of related reserves at December 31, 2008, is significant to the financial statements as most of these tenants were current with their rental payments at the date they filed for bankruptcy protection.
 
The retail shopping sector has been affected by the competitive nature of the retail business and the competition for market share as well as general economic conditions where stronger retailers have out-positioned some of the weaker retailers. These shifts have forced some market share away from weaker retailers and required


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them, in some cases, to declare bankruptcyand/or close stores. Certain retailers have announced store closings even though they have not filed for bankruptcy protection. However, these store closings often represent a relatively small percentage of the Company’s overall gross leasable area and therefore, the Company does not expect these closings to have a material adverse effect on the Company’s overall long-term performance. Overall, the Company’s portfolio remains stable. While negative news relating to troubled retail tenants tends to attract attention, the vacancies created by unsuccessful tenants may also create opportunities to increase rent. However, there can be no assurances that these events will not adversely affect the Company (see Risk Factors).
 
Historically, the Company’s portfolio has performed consistently throughout many economic cycles, including downward cycles. Broadly speaking, national retail sales have grown consistently since World War II, including during several recessions and housing slowdowns. In the past the Company has not experienced significant volatility in its long-term portfolio occupancy rate. The Company has experienced downward cycles before and has made the necessary adjustments to leasing and development strategies to accommodate the changes in the operating environment and mitigate risk. In many cases, the loss of a weaker tenant creates an opportunity to re-lease space at higher rents to a stronger retailer. More importantly, the quality of the property revenue stream is high and consistent, as it is generally derived from retailers with good credit profiles under long-term leases, with very little reliance on overage rents generated by tenant sales performance. The Company believes that the quality of its shopping center portfolio is strong, as evidenced by the high historical occupancy rates, which have ranged from 92% to 96% since the Company’s initial public offering in 1993. We experienced a decline in the fourth quarter of 2008 occupancy and expect continuation of that trend into 2009. However, with year-end occupancy at 92.1%, the portfolio occupancy remains healthy. Notwithstanding the recent decline in occupancy, the Company continues to sign a large number of new leases, with overall leasing spreads that continue to trend positively, as new leases and renewals have historically. Moreover, the Company has been able to achieve these results without significant capital investment in tenant improvements or leasing commissions. In 2008, the Company assembled an Anchor Store Redevelopment Department staffed with seasoned leasing professionals dedicated to releasing vacant anchor space created by recent bankruptcies and store closings. While tenants may come and go over time, shopping centers that are well-located and actively managed are expected to perform well. The Company is very conscious of, and sensitive to, the risks posed to the economy, but is currently comfortable that the position of its portfolio and the general diversity and credit quality of its tenant base should enable it to successfully navigate through these challenging economic times.
 
LEGAL MATTERS
 
The Company is a party to litigation filed in November 2006 by a tenant in a Company property located in Long Beach, California. The tenant filed suit against the Company and certain affiliates, claiming the Company and its affiliates failed to provide adequate valet parking at the property pursuant to the terms of the lease with the tenant. After a six-week trial, the jury returned a verdict in October 2008, finding the Company liable for compensatory damages in the amount of approximately $7.8 million. The Company strongly disagrees with the verdict and has filed a motion for new trial and a motion for judgment notwithstanding the verdict. In the event the Company’s post-trial motions are unsuccessful, the Company intends to appeal the verdict. The Company recorded a charge during the year ended December 31, 2008, which represents management’s best estimate of loss based upon a range of liability pursuant to SFAS No. 5, “Accounting for Contingencies.” The accrual, as well as the related litigation costs incurred to date, was recorded in Other Expense, net in the consolidated statements of operations. The Company will continue to monitor the status of the litigation and revise the estimate of loss as appropriate. Although the Company believes it has meritorious defenses, there can be no assurance that the Company’s post-trial motions will be granted or that an appeal will be successful.
 
In addition to the litigation discussed above, the Company and its subsidiaries are subject to various legal proceedings, which, taken together, are not expected to have a material adverse effect on the Company. The Company is also subject to a variety of legal actions for personal injury or property damage arising in the ordinary course of its business, most of which are covered by insurance. While the resolution of all matters cannot be predicted with certainty, management believes that the final outcome of such legal proceedings and claims will not have a material adverse effect on the Company’s liquidity, financial position or results of operations.


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NEW ACCOUNTING STANDARDS
 
New Accounting Standards Implemented
 
The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115 — SFAS 159
 
In February 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”), which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value on aninstrument-by-instrumentbasis, that are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes (i.e., unrealized gains and losses) in fair value must be recorded in earnings. Additionally, SFAS 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded to beginning retained earnings. The Company adopted SFAS 159 on January 1, 2008, and did not elect to measure any assets, liabilities or firm commitments at fair value.
 
Fair Value Measurements — SFAS 157
 
In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides guidance for using fair value to measure assets and liabilities. This statement clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing the asset or liability. SFAS 157 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data. SFAS 157 applies whenever other standards require assets or liabilities to be measured at fair value. SFAS 157 also provides for certain disclosure requirements, including, but not limited to, the valuation techniques used to measure fair value and a discussion of changes in valuation techniques, if any, during the period. The Company adopted this statement for disclosure requirements and its financial assets and liabilities, including valuations associated with the impairment assessment of unconsolidated joint ventures on January 1, 2008.
 
For nonfinancial assets and nonfinancial liabilities that are not recognized or disclosed at fair value on a recurring basis, the statement is effective for fiscal years beginning after November 15, 2008. The Company is currently evaluating the impact that this statement, for nonfinancial assets and liabilities, will have on its financial position and results of operations.
 
FSPFAS 140-4and FIN 46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities
 
In December 2008, the FASB issued Staff Position (“FSP”)FAS No. 140-4and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities” (“FSPFAS 140-4”).The purpose of this FSP is to improve disclosures by public entities and enterprises until pending amendments to SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” (“SFAS 140”), and FIN 46(R) are finalized and approved by the FASB. The FSP amends SFAS 140 to require public entities to provide additional disclosures about transferors’ continuing involvements with transferred financial assets. It also amends FIN 46(R) to require public enterprises, to provide additional disclosures about their involvement with variable interest entities. FSPFAS 140-4and FIN 46(R)-8 is effective for financial statements issued for fiscal years and interim periods ending after December 15, 2008. For periods after the initial adoption date, comparative disclosures are required. The Company adopted the FSP and FIN 46(R)-8 on December 31, 2008.
 
Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active — FSPFAS 157-3
 
In October 2008, the FASB issued FSPFAS No. 157-3,“Fair Value Measurements” (“FSPFAS 157-3”),which clarifies the application of SFAS 157 in an inactive market and provides an example to demonstrate how the fair value of a financial asset is determined when the market for that financial asset is inactive. FSPFAS 157-3was effective upon issuance, including prior periods for which financial statements had not been issued. The adoption of


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this standard as of September 30, 2008, did not have a material impact on the Company’s financial position and results of operations.
 
New Accounting Standards to be Implemented
 
Business Combinations — SFAS 141(R)
 
In December 2007, the FASB issued Statement No. 141 (revised 2007), “Business Combinations” (“SFAS 141(R)”). The objective of this statement is to improve the relevance, representative faithfulness and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To accomplish that, this statement establishes principles and requirements for how the acquirer: (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest of the acquiree, (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and (iii) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after December 15, 2008. Early adoption is not permitted. The Company adopted SFAS 141(R) on January 1, 2009. To the extent that the Company enters into new acquisitions in 2009 and beyond that qualify as businesses, this standard will require that acquisition costs and certain fees, which are currently capitalized and allocated to the basis of the acquisition, be expensed as these costs are incurred. Because of this change in accounting for costs, the Company expects that the adoption of this standard could have a negative impact on the Company’s results of operations depending on the size of a transaction and the amount of costs incurred. (The Company is currently assessing the impact, if any, the adoption of SFAS 141(R) will have on its financial position and results of operations.) The Company will assess the impact of significant transactions, if any, as they are contemplated.
 
Non-Controlling Interests in Consolidated Financial Statements — an Amendment ofARB No. 51 —SFAS 160
 
In December 2007, the FASB issued Statement No. 160, “Non-Controlling Interest in Consolidated Financial Statements — an Amendment of ARB No. 51” (“SFAS 160”). A non-controlling interest, sometimes called minority equity interest, is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. The objective of this statement is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require: (i) the ownership interest in subsidiaries held by other parties other than the parent be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity; (ii) the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of operations; (iii) changes in a parent’s ownership interest while the parent retains its controlling financial interest in a subsidiary be accounted for consistently and requires that they be accounted for similarly, as equity transactions; (iv) when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary be initially measured at fair value (the gain or loss on the deconsolidation of the subsidiary is measured using the fair value of any non-controlling equity investments rather than the carrying amount of that retained investment) and (v) entities provide sufficient disclosures that clearly identify and distinguish between the interest of the parent and the interest of the non-controlling owners. This statement is effective for fiscal years, and interim reporting periods within those fiscal years, beginning on or after December 15, 2008, and is applied on a prospective basis. Early adoption is not permitted. The Company is currently assessing the impact, if any, the adoption of SFAS 160 will have on the Company’s financial position and results of operations.
 
Disclosures about Derivative Instruments and Hedging Activities — SFAS 161
 
In March 2008, the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”), which is intended to help investors better understand how derivative instruments and hedging activities affect an entity’s financial position, financial performance and cash flows through enhanced disclosure requirements. The enhanced disclosures primarily surround disclosing the objectives and strategies for using derivative instruments by their underlying risk as well as a tabular format of the fair values of the derivative


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instruments and their gains and losses. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company is currently assessing the impact, if any, that the adoption of SFAS 161 will have on its financial statement disclosures.
 
Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) — FSP APB14-1
 
In May 2008, the FASB issued a FSP, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB14-1”).FSP APB 14-1prohibits the classification of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, as debt instruments within the scope of FSP APB14-1 and requires issuers of such instruments to separately account for the liability and equity components by allocating the proceeds from the issuance of the instrument between the liability component and the embedded conversion option (i.e., the equity component). FSP APB14-1requires that the debt proceeds from the $250 million of 3.5% convertible notes, due in 2011, and $600 million of 3.0% convertible notes, due in 2012, be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt. The difference between the principal amount of the debt and the amount of the proceeds allocated to the liability component are required to be reported as a debt discount and subsequently amortized to earnings over the instrument’s expected life using the interest method. As a result, the Company will report a lower net income as interest expense would be increased to include both the current period’s amortization of the debt discount and the instrument’s coupon interest. The adoption of FSP APB14-1 will result in the Company restating prior years and recording a charge to interest expense of approximately $14.9 million, $12.1 million and $1.3 million, respectively, and $0.12 per share (basic and diluted), $0.10 per share (basic and diluted) and $0.01 per share (basic and diluted), respectively, for the years ended December 31, 2008, 2007 and 2006, in future financial statements. FSP APB14-1 is effective for fiscal years beginning after December 15, 2008, and for interim periods within those fiscal years, with retrospective application required. Early adoption is not permitted.
 
Accounting for Transfers of Financial Assets and Repurchase Financing Transactions — FSPFAS 140-3
 
In February 2008, the FASB issued an FSP, “Accounting for Transfers of Financial Assets and Repurchase Financing Transactions” (“FSPFAS 140-3”).FSPFAS No. 140-3addresses the issue of whether or not these transactions should be viewed as two separate transactions or as one “linked” transaction. FSPFAS 140-3includes a “rebuttable presumption” linking the two transactions unless the presumption can be overcome by meeting certain criteria. FSPFAS 140-3is effective for fiscal years beginning after November 15, 2008, and will apply only to original transfers made after that date; early adoption is not permitted. The Company is currently evaluating the impact, if any, the adoption of FSPFAS 140-3will have on its financial position and results of operations.
 
Determination of the Useful Life of Intangible Assets — FSPFAS 142-3
 
In April 2008, the FASB issued an FSP “Determination of the Useful Life of Intangible Assets”(“FSP 142-3”),which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142.FSP 142-3is intended to improve the consistency between the useful life of an intangible asset determined under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R) and other U.S. Generally Accepted Accounting Principles. The guidance for determining the useful life of a recognized intangible asset in this FSP shall be applied prospectively to intangible assets acquired after the effective date. The disclosure requirements in this FSP shall be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date.FSP 142-3is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is not permitted. The Company is currently evaluating the impact, if any, the adoption of FSP,142-3 will have on its financial position and results of operations.


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Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities — FSP EITF03-6-1
 
In June 2008, the FASB issued an FSP “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (“FSPEITF 03-6-1”),which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method as described in SFAS No. 128, “Earnings per Share.” Under the guidance in FSPEITF 03-6-1,unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. All prior-period earnings per share data presented shall be adjusted retrospectively. Early adoption is not permitted. The Company is currently assessing the impact, if any, the adoption of FSPEITF 03-6-1will have on its financial position and results of operations.
 
EITF IssueNo. 08-6,Equity Method Investment Accounting Considerations
 
In November 2008, the FASB issued EITF IssueNo. 08-6,“Equity Method Investment Accounting Considerations”(“EITF 08-6”).EITF 08-6clarifies the accounting for certain transactions and impairment considerations involving equity method investments.EITF 08-6applies to all investments accounted for under the equity method.EITF 08-6is effective for fiscal years and interim periods beginning on or after December 15, 2008. The Company is currently assessing the impact, if any, the adoption ofEITF 08-6will have on its financial position and results of operations
 
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
The Company’s primary market risk exposure is interest rate risk. The Company’s debt, excluding unconsolidated joint venture debt, is summarized as follows:
 
                                 
  December 31, 2008  December 31, 2007 
     Weighted-
  Weighted-
        Weighted
  Weighted
    
     Average
  Average
        Average
  Average
    
  Amount
  Maturity
  Interest
  Percentage
  Amount
  Maturity
  Interest
  Percentage
 
  (Millions)  (Years)  Rate  of Total  (Millions)  (Years)  Rate  of Total 
 
Fixed-Rate Debt (1)
 $4,426.2   3.0   5.1%  74.8% $4,533.1   3.9   5.1%  81.1%
Variable-Rate Debt (1)
 $1,491.2   2.7   1.7%  25.2% $1,057.9   4.1   5.3%  18.9%
 
 
(1)Adjusted to reflect the $600 million of variable-rate debt that LIBOR was swapped to a fixed-rate of 5.0% at December 31, 2008 and 2007.
 
The Company’s unconsolidated joint ventures’ fixed-rate indebtedness, including $557.3 million of variable-rate LIBOR debt that was swapped to a weighted-average fixed rate of approximately 5.3% at December 31, 2007 is summarized as follows:
 
                                 
  December 31, 2008  December 31, 2007 
  Joint
  Company’s
  Weighted-
  Weighted-
  Joint
  Company’s
  Weighted
  Weighted
 
  Venture
  Proportionate
  Average
  Average
  Venture
  Proportionate
  Average
  Average
 
  Debt
  Share
  Maturity
  Interest
  Debt
  Share
  Maturity
  Interest
 
  (Millions)  (Millions)  (Years)  Rate  (Millions)  (Millions)  (Years)  Rate 
 
Fixed-Rate Debt
 $4,581.6  $982.3   5.3   5.5% $4,516.4  $860.5   5.9   5.3%
Variable-Rate Debt
 $1,195.3  $233.8   1.2   2.2% $1,035.4  $173.6   1.5   5.5%
 
The Company intends to utilize retained cash flow, including proceeds from asset sales, construction financing and variable-rate indebtedness available under its Revolving Credit Facilities, to initially fund future acquisitions, developments and expansions of shopping centers. Thus, to the extent the Company incurs additional variable-rate indebtedness, its exposure to increases in interest rates in an inflationary period would increase. The Company does not believe, however, that increases in interest expense as a result of inflation will significantly impact the Company’s distributable cash flow.


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The interest rate risk on a portion of the Company’s and its unconsolidated joint ventures’ variable-rate debt described above has been mitigated through the use of interest rate swap agreements (the “Swaps”) with major financial institutions. At December 31, 2008 and 2007, the interest rate on the Company’s $600 million consolidated floating rate debt was swapped to fixed rates. At December 31, 2007, the interest rate on the Company’s $557.3 million of unconsolidated joint venture floating rate debt (of which $80.8 million is the Company’s proportionate share) was swapped to fixed rates. The Company is exposed to credit risk in the event of non-performance by the counter-parties to the Swaps. The Company believes it mitigates its credit risk by entering into Swaps with major financial institutions.
 
In November 2007, the Company entered into a treasury lock with a notional amount of $100 million. The treasury lock was terminated in connection with the issuance of mortgage debt in March 2008. The treasury lock was executed to hedge the benchmark interest rate associated with forecasted interest payments associated with the anticipated issuance of fixed-rate borrowings. The effective portion of these hedging relationships has been deferred in accumulated other comprehensive income and will be reclassified into earnings over the term of the debt as an adjustment to earnings, based on the effective-yield method.
 
The Company’s unconsolidated joint ventures have various interest rate swaps, which had an aggregate fair value that represented a net liability of $20.5 million, of which $3.0 million was the Company’s proportionate share at December 31, 2007. These swaps were either terminated or determined to be ineffective in 2008. These swaps had notional amounts and effectively converted variable-rate LIBOR to fixed rates as follows:
 
     
December 31, 2007
Notional Amount
 Fixed-rate
 
$ 75.0
  4.90% 
$ 75.0
  5.22% 
$157.3
  5.25% 
$ 70.0
  5.79% 
$ 80.0
  5.09% 
$100.0
  5.47% 
 
One of the Company’s joint ventures, DDR Macquarie Fund, entered into fixed-rate interest swaps that carry notional amounts of $377.3 million and $79.1 million, of which the Company’s proportionate share was $94.3 million and $11.5 million at December 31, 2008 and 2007, respectively. These swaps converted variable-rate LIBOR to a weighted-average fixed rate of 5.1% and 4.6%, respectively. These derivatives are marked to market with the adjustments flowing through its income statement. The fair value adjustment at December 31, 2008 and 2007, was not significant. The fair value of the swaps referred to above was calculated based upon expected changes in future benchmark interest rates.
 
The fair value of the Company’s fixed-rate debt adjusted to: (i) include the $600 million that was swapped to a fixed rate at December 31, 2008 and 2007; (ii) include the Company’s proportionate share of the joint venture fixed-rate debt and (iii) include the Company’s proportionate share of $80.8 million that was swapped to a fixed rate at December 31, 2007, and an estimate of the effect of a 100 point increase at December 31, 2008 and a 100 point decrease in market interest rates at December 31, 2007, is summarized as follows:
 
                         
  December 31, 2008  December 31, 2007 
        100 Basis
        100 Basis
 
        Point
        Point
 
        Increase
        Decrease
 
        in Market
        in Market
 
  Carrying
  Fair
  Interest
  Carrying
  Fair
  Interest
 
  Value
  Value
  Rates
  Value
  Value
  Rates
 
  (Millions)  (Millions)  (Millions)  (Millions)  (Millions)  (Millions) 
 
Company’s fixed-rate debt
 $4,426.2  $3,384.8(1) $3,328.9(2) $4,533.1  $4,421.0(1) $4,525.0(2)
Company’s proportionate share of joint venture fixed-rate debt
 $982.3  $911.0  $878.8  $860.5  $880.1(3) $927.0(4)


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(1)Includes the fair value of interest rate swaps, which was a liability of $21.7 million and $17.8 million at December 31, 2008 and 2007, respectively.
 
(2)Includes the fair value of interest rate swaps, which was a liability of $26.1 million and $32.0 million at December 31, 2008 and 2007, respectively.
 
(3)Includes the Company’s proportionate share of the fair value of interest rate swaps that was a liability of $3.0 million at December 31, 2007.
 
(4)Includes the Company’s proportionate share of the fair value of interest rate swaps that was a liability of $7.5 million at December 31, 2007.
 
The sensitivity to changes in interest rates of the Company’s fixed-rate debt was determined utilizing a valuation model based upon factors that measure the net present value of such obligations that arise from the hypothetical estimate as discussed above.
 
Further, a 100 basis point increase in short-term market interest rates at December 31, 2008 and 2007, would result in an increase in interest expense of approximately $14.9 million and $10.6 million, respectively, for the Company and $2.3 million and $1.7 million, respectively, representing the Company’s proportionate share of the joint ventures’ interest expense relating to variable-rate debt outstanding for the twelve-month periods. The estimated increase in interest expense for the year does not give effect to possible changes in the daily balance for the Company’s or joint ventures’ outstanding variable-rate debt.
 
The Company and its joint ventures intend to continually monitor and actively manage interest costs on their variable-rate debt portfolio and may enter into swap positions based on market fluctuations. In addition, the Company believes that it has the ability to obtain funds through additional equityand/or debt offerings, including the issuance of medium term notes and joint venture capital. Accordingly, the cost of obtaining such protection agreements in relation to the Company’s access to capital markets will continue to be evaluated. The Company has not, and does not plan to, enter into any derivative financial instruments for trading or speculative purposes. As of December 31, 2008, the Company had no other material exposure to market risk.
 
Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
The response to this item is included in a separate section at the end of this report beginning onpage F-1.
 
Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
None.
 
Item 9A.  CONTROLS AND PROCEDURES
 
Disclosure Controls and Procedures
 
Based on their evaluation as required by Securities Exchange ActRules 13a-15(b)and15d-15(b),the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have concluded that the Company’s disclosure controls and procedures (as defined in Securities Exchange ActRules 13a-15(e)and15d-15(e))are effective as of December 31, 2008, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and were effective as of December 31, 2008, to ensure that information required to be disclosed by the Company issuer in the reports that it files or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
 
Management’s Report on Internal Control Over Financial Reporting
 
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Securities Exchange ActRule 13a-15(f).Because of its inherent limitations,


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internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of its internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. Based on those criteria, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2008.
 
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2008, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
 
Changes in Internal Control over Financial Reporting
 
During the three-month period ended December 31, 2008, there were no changes in the Company’s internal control over financial reporting that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
 
Item 9B.  OTHER INFORMATION
 
The Company’s 2009 annual meeting of shareholders was rescheduled to be held more than 30 days from the date of its 2008 annual meeting of shareholders. The 2009 annual meeting of shareholders will be held on June 25, 2009. Accordingly, any shareholder proposals intended to be presented at the Company’s 2009 annual meeting of shareholders must be received by our Secretary at 3300 Enterprise Parkway, Beachwood, Ohio 44122, on or before March 20, 2009, for inclusion in the proxy statement and form of proxy relating to the 2009 annual meeting of shareholders. As to any proposal that a shareholder intends to present to shareholders other than by inclusion in the proxy statement for the Company’s 2009 annual meeting of shareholders, the proxies named in management’s proxy for that meeting will be entitled to exercise their discretionary voting authority of that proposal unless the Company receives notice of the matter to be proposed not later than March 27, 2009. Even if proper notice is received on or prior to March 27, 2009, the proxies named in the proxy for that meeting may nevertheless exercise their discretionary authority with respect to such matter by advising shareholders of that proposal and how they intend to exercise their discretion to vote on such matter, unless the shareholder making the proposal solicits proxies with respect to the proposal to the extent required by Rule 14a-4(c)(2) under the Exchange Act.


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PART III
 
Item 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
The Company’s Board of Directors has adopted the following corporate governance documents:
 
  • Corporate Governance Guidelines that guide the Board of Directors in the performance of its responsibilities to serve the best interests of the Company and its shareholders;
 
  • Written charters of the Audit Committee, Executive Compensation Committee and Nominating and Corporate Governance Committee;
 
  • Code of Ethics for Senior Financial Officers that applies to the chief executive officer, chief financial officer, chief accounting officer, controllers, treasurer and chief internal auditor, if any, of the Company and
 
  • Code of Business Conduct and Ethics that governs the actions and working relationships of the Company’s employees, officers and directors with current and potential customers, consumers, fellow employees, competitors, government and self-regulatory agencies, investors, the public, the media and anyone else with whom the Company has or may have contact.
 
Copies of the Company’s corporate governance documents are available on the Company’s website, www.ddr.com, under “Investor Relations — Corporate Governance” and will be provided, free of charge, to any shareholder who requests a copy by calling Francine Glandt, Vice President of Capital Markets and Treasurer, at(216) 755-5500,or by writing to Developers Diversified Realty Corporation, Investor Relations at 3300 Enterprise Parkway, Beachwood, Ohio 44122.
 
Certain other information required by this Item 10 is incorporated by reference to the information under the headings “Proposal One: Election of Directors — Nominees for Director” and “— Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” contained in the Company’s Proxy Statement in connection with its annual meeting of shareholders to be held on June 25, 2009, and the information under the heading “Executive Officers” in Part I of this Annual Report onForm 10-K.
 
Item 11.  EXECUTIVE COMPENSATION
 
Information required by this Item 11 is incorporated herein by reference to the information under the headings “Proposal One: Election of Directors — Compensation of Directors” and “Executive Compensation” contained in the Company’s Proxy Statement in connection with its annual meeting of shareholders to be held on June 25, 2009.
 
Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
Certain information required by this Item 12 is incorporated herein by reference to the “Security Ownership of Certain Beneficial Owners and Management” section of the Company’s Proxy Statement in connection with its annual meeting of shareholders to be held on June 25, 2009. The following table sets forth the number of securities


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issued and outstanding under the existing plans, as of December 31, 2008, as well as the weighted-average exercise price of outstanding options.
 
EQUITY COMPENSATION PLAN INFORMATION
 
             
        Number of Securities
 
        Remaining Available for
 
  Number of Securities
     Future Issuance Under
 
  to Be Issued upon
  Weighted-Average
  Equity Compensation
 
  Exercise of
  Exercise Price of
  Plans (excluding
 
  Outstanding Options,
  Outstanding Options,
  securities reflected in
 
Plan category
 Warrants and Rights  Warrants and Rights  column (a)) 
  (a)  (b)  (c) 
 
Equity compensation plans approved by security holders (1)
  2,185,708(2) $42.32   3,883,908 
Equity compensation plans not approved by security holders (3)
  31,666  $17.70   N/A 
             
Total
  2,217,374  $41.97   3,883,908 
 
 
(1)Includes information related to the Company’s 1992 Employee’s Share Option Plan, 1996 Equity Based Award Plan, 1998 Equity Based Award Plan, 2002 Equity Based Award Plan, 2004 Equity Based Award Plan and 2008 Equity Based Award Plan.
 
(2)Does not include 590,489 shares of restricted stock, as these shares have been reflected in the Company’s total shares outstanding. Does not include 103,700 shares reserved for issuance under outperformance unit agreements.
 
(3)Represents options issued to directors of the Company. The options granted to the directors were at the fair market value at the date of grant and are fully vested.
 
Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
Information required by this Item 13 is incorporated herein by reference to the “Certain Transactions” section of the Company’s Proxy Statement in connection with its annual meeting of shareholders to be held on June 25, 2009.
 
Item 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES
 
Information required by this Item 14 is incorporated herein by reference to the “Fees Paid to PricewaterhouseCoopers LLP” section of the Company’s Proxy Statement in connection with its annual meeting of shareholders to be held on June 25, 2009.
 
PART IV
 
Item 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 
  a.) 1. Financial Statements
 
The following documents are filed as a part of this report:
 
Report of Independent Registered Public Accounting Firm.
 
Consolidated Balance Sheets as of December 31, 2008 and 2007.
 
Consolidated Statements of Operations for the three years ended December 31, 2008.
 
Consolidated Statements of Shareholders’ Equity for the three years ended December 31, 2008.
 
Consolidated Statements of Cash Flows for the three years ended December 31, 2008.
 
Notes to the Consolidated Financial Statements.


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Table of Contents

      2. Financial Statement Schedules
 
The following financial statement schedules are filed herewith as part of this Annual Report onForm 10-Kand should be read in conjunction with the Consolidated Financial Statements of the registrant:
 
            Schedule
 
II — Valuation and Qualifying Accounts and Reserves for the three years ended December 31, 2008.
 
III — Real Estate and Accumulated Depreciation at December 31, 2008.
 
IV — Mortgage Loans on Real Estate at December 31, 2008.
 
Schedules not listed above have been omitted because they are not applicable or because the information required to be set forth therein is included in the Consolidated Financial Statements or notes thereto.
 
Financial statements of the Company’s unconsolidated joint venture companies, except for DDRTC Core Retail Fund, LLC, TRT DDR Venture I General Partnership and Macquarie DDR Trust, have been omitted because they do not meet the significant subsidiary definition of S-X 210.1-02 (w).
 
b)  Exhibits — The following exhibits are filed as part of or incorporated by reference into, this report:
 
           
Exhibit No.
 Form 10-K
   Filed Herewith or
Under Reg.S-K
 Exhibit
   Incorporated Herein by
Item 601
 
No.
 
Description
 
Reference
 
 1   1.1 Sales Agency Financing Agreement, dated December 3, 2008, by and between the Company and BNY Mellon Capital Markets, LLC Current Report on Form 8-K (Filed with the SEC on December 3, 2008)
 2   2.1 Agreement and Plan of Merger, dated October 20, 2006, by and among the Company, Inland Retail Real Estate Trust, Inc. and DDR IRR Acquisition LLC Current Report on Form 8-K (Filed October 23, 2006)
 2   2.2 Purchase and Sale Agreement, dated July 9, 2008, by and between the Company and Wolstein Business Enterprises, L.P.  Current Report on Form 8-K (Filed with the SEC on July 15, 2008)
 3   3.1 Second Amended and Restated Articles of Incorporation of the Company Form S-3ASR Registration Statement No. 333-152083 (Filed with the SEC on
July 2, 2008)
 3   3.2 Amended and Restated Code of Regulations of the Company Quarterly Report on Form 10-Q (Filed with the SEC on August 9, 2007)
 4   4.1 Specimen Certificate for Common Shares Form S-3 Registration No. 33-78778 (Filed with the SEC on May 10, 1994)
 4   4.2 Specimen Certificate for 8.0% Class G Cumulative Redeemable Preferred Shares Form 8-A Registration Statement (Filed with the SEC on March 25, 2003)
 4   4.3 Specimen Certificate for Depositary Shares Relating to 8.0% Class G Cumulative Redeemable Preferred Shares Form 8-A Registration Statement (Filed with the SEC on March 25, 2003)
 4   4.4 Specimen Certificate for 73/8% Class H Cumulative Redeemable Preferred Shares Form 8-A Registration Statement (Filed with the SEC on July 17, 2003)
 4   4.5 Specimen Certificate for Depositary Shares Relating to 73/8% Class H Cumulative Redeemable Preferred Shares Form 8-A Registration Statement (Filed with the SEC on July 17, 2003)
 4   4.6 Specimen Certificate for 7.50% Class I Cumulative Redeemable Preferred Shares Form 8-A Registration Statement (Filed with the SEC on May 4, 2004)
 4   4.7 Specimen Certificate for Depositary Shares Relating to 7.50% Class I Cumulative Redeemable Preferred Shares Form 8-A Registration Statement (Filed with the SEC on May 4, 2004)


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Exhibit No.
 Form 10-K
   Filed Herewith or
Under Reg.S-K
 Exhibit
   Incorporated Herein by
Item 601
 
No.
 
Description
 
Reference
 
 4   4.8 Indenture, dated May 1, 1994, by and between the Company and Chemical Bank, as Trustee Form S-3 Registration No. 333-108361 (Filed with the SEC on August 29, 2003)
 4   4.9 Indenture, dated May 1, 1994, by and between the Company and National City Bank, as Trustee (“NCB Indenture”) Form S-3 Registration No. 333-108361 (Filed with the SEC on August 29, 2003)
 4   4.10 First Supplement to NCB Indenture Form S-3 Registration No. 333-108361 (Filed with the SEC on August 29, 2003)
 4   4.11 Second Supplement to NCB Indenture Form S-3 Registration No. 333-108361 (Filed with the SEC on August 29, 2003)
 4   4.12 Third Supplement to NCB Indenture Form S-4 Registration No. 333-117034 (Filed with the SEC on June 30, 2004)
 4   4.13 Fourth Supplement to NCB Indenture Form S-4 Registration No. 333-117034 (Filed with the SEC on June 30, 2004)
 4   4.14 Fifth Supplement to NCB Indenture Annual Report on Form 10-K (Filed with the SEC on February 21, 2007)
 4   4.15 Sixth Supplement to NCB Indenture Annual Report on Form 10-K (Filed with the SEC on February 21, 2007)
 4   4.16 Seventh Supplement to NCB Indenture Current Report on Form 8-K (Filed with the SEC on September 1, 2006)
 4   4.17 Eight Supplement to NCB Indenture Current Report on Form 8-K (Filed with the SEC on March 16, 2007)
 4   4.18 Form of Fixed Rate Senior Medium-Term Note Annual Report on Form 10-K (Filed with the SEC on March 30, 2000; File No.
          001-11690)
 4   4.19 Form of Floating Rate Senior Medium- Term Note Annual Report on Form 10-K (Filed with the SEC on March 30, 2000; File No.
          001-11690)
 4   4.20 Form of Fixed Rate Subordinated Medium-Term Note Annual Report on Form 10-K (Filed with the SEC on March 30, 2000; File No.
          001-11690)
 4   4.21 Form of Floating Rate Subordinated Medium-Term Note Annual Report on Form 10-K (Filed with the SEC on March 30, 2000; File No.
          001-11690)
 4   4.22 Form of 3.875% Note due 2009 Current Report on Form 8-K (Filed with the SEC on January 22, 2004)
 4   4.23 Form of 5.25% Note due 2011 Form S-4 Registration No. 333-117034 (Filed with the SEC on June 30, 2004)
 4   4.24 Form of 3.00% Convertible Senior Note due 2012 Current Report on Form 8-K (Filed with the SEC on March 16, 2007)
 4   4.25 Form of 3.50% Convertible Senior Note due 2011 Current Report on Form 8-K (Filed with the SEC on September 1, 2006)
 4   4.26 Seventh Amended and Restated Credit Agreement, dated June 29, 2006, by and among the Company and JPMorgan Securities, Inc. and Banc of America Securities LLC, and other lenders named therein Current Report on Form 8-K (Filed with the SEC on July 6, 2006)
 4   4.27 First Amendment to the Seventh Amended and Restated Revolving Credit Agreement, dated March 30, 2007, by and among the Company and JPMorgan Chase Bank, N.A and other lenders named therein Current Report on Form 8-K (Filed with the SEC on February 26, 2007)

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Exhibit No.
 Form 10-K
   Filed Herewith or
Under Reg.S-K
 Exhibit
   Incorporated Herein by
Item 601
 
No.
 
Description
 
Reference
 
 4   4.28 Second Amendment to the Seventh Amended and Restated Revolving Credit Agreement, dated December 7, 2007, by and among the Company and JPMorgan Chase Bank, N.A and other lenders named therein Current Report on Form 8-K (Filed with the SEC on December 12, 2007)
 4   4.29 Third Amendment to the Seventh Amended and Restated Revolving Credit Agreement, dated December 26, 2007, by and among the Company and JPMorgan Chase Bank, N.A and other lenders named therein Current Report on Form 8-K (Filed with the SEC on December 28, 2007)
 4   4.30 First Amended and Restated Secured Term Loan Agreement, dated June 29, 2006, by and among the Company and Keybanc Capital Markets and Banc of America Securities, LLC and other lenders named therein Current Report on Form 8-K (Filed with the SEC on July 6, 2006)
 4   4.31 Second Amendment to the First Amended and Restated Secured Term Loan Agreement, dated March 30, 2007, by and among the Company, Keybanc Capital Markets and Banc of America Securities, LLC and other lenders named therein Quarterly Report on Form 10-Q (Filed with the SEC on May 10, 2007)
 4   4.32 Third Amendment to the First Amended and Restated Secured Term Loan Agreement, dated December 10, 2007, by and among the Company, Keybanc Capital Markets and Banc of America Securities, LLC and other lenders named therein Current Report on Form 8-K (Filed with the SEC on December 12, 2007)
 4   4.33 Form of Indemnification Agreement Annual Report on Form 10-K (Filed with the SEC on March 15, 2004)
 4   4.34 Registration Rights Agreement, dated March 3, 2007, by and among the Company and the Initial Purchasers named therein Current Report on Form 8-K (Filed with the SEC on March 16, 2007)
 4   4.35 Registration Rights Agreement, dated August 28, 2006, by and among the Company and the Initial Purchasers named therein Current Report on Form 8-K (Filed with the SEC on September 1, 2006)
 10   10.1 Stock Option Plan* Form S-8 Registration No. 33-74562 (Filed with the SEC on January 28, 1994)
 10   10.2 Amended and Restated Directors’ Deferred Compensation Plan* Form S-8 Registration No. 333-147270 (Filed with the SEC on November 9, 2007)
 10   10.3 Elective Deferred Compensation Plan (Amended and Restated as of January 1, 2004)* Annual Report on Form 10-K (Filed with the SEC on March 15, 2004)
 10   10.4 Developers Diversified Realty Corporation Equity Deferred Compensation Plan* Form S-3 Registration No. 333-108361 (Filed with the SEC on August 29, 2003)
 10   10.5 Developers Diversified Realty Corporation Equity Deferred Compensation Plan, restated as of January 1, 2009* Filed herewith
 10   10.6 Developers Diversified Realty Corporation Equity-Based Award Plan* Annual Report on Form 10-K (Filed with the SEC on March 15, 2004)
 10   10.7 Amended and Restated 1998 Developers Diversified Realty Corporation Equity-Based Award Plan* Form S-8 Registration No. 333-76537 (Filed with the SEC on April 19, 1999)
 10   10.8 2002 Developers Diversified Realty Corporation Equity-Based Award Plan* Quarterly Report on Form 10-Q (Filed with the SEC on August 14, 2002)

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Exhibit No.
 Form 10-K
   Filed Herewith or
Under Reg.S-K
 Exhibit
   Incorporated Herein by
Item 601
 
No.
 
Description
 
Reference
 
 10   10.9 2004 Developers Diversified Realty Corporation Equity-Based Award Plan* Form S-8 Registration No. 333-117069 (Filed with the SEC on July 1, 2004)
 10   10.10 2008 Developers Diversified Realty Corporation Equity-Based Award Plan* Current Report on Form 8-K (Filed with the SEC on May 15, 2008)
 10   10.11 Form of Restricted Share Agreement under the 1996/1998/2002/2004 Developers Diversified Realty Corporation Equity-Based Award Plan* Annual Report on Form 10-K (Filed with the SEC on March 16, 2005)
 10   10.12 Form of Restricted Share Agreement for Executive Officers under the 2004 Developers Diversified Realty Corporation Equity-Based Award Plan* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.13 Form of Incentive Stock Option Grant Agreement for Executive Officers under the 2004 Developers Diversified Realty Corporation Equity-Based Award Plan* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.14 Form of Incentive Stock Option Grant Agreement for Executive Officers (with accelerated vesting upon retirement) under the 2004 Developers Diversified Realty Corporation Equity-Based Award Plan* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.15 Form of Non-Qualified Stock Option Grant Agreement for Executive Officers under the 2004 Developers Diversified Realty Corporation Equity-Based Award Plan* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.16 Form of Non-Qualified Stock Option Grant Agreement for Executive Officers (with accelerated vesting upon retirement) under the 2004 Developers Diversified Realty Corporation Equity-Based Award Plan* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.17 Form of Directors’ Restricted Shares Agreement, dated January 1, 2000* Form S-11 Registration No. 333-76278 (Filed with SEC on January 4, 2002; see
          Exhibit 10(ff) therein)
 10   10.18 Performance Units Agreement, dated March 1, 2000, by and between the Company and Scott A. Wolstein* Annual Report on Form 10-K (Filed with the SEC on March 8, 2002)
 10   10.19 Performance Units Agreement, dated January 2, 2002, by and between the Company and Scott A. Wolstein* Annual Report on Form 10-K (Filed with the SEC on March 8, 2002)
 10   10.20 Performance Units Agreement, dated January 2, 2002, between the Company and David M. Jacobstein* Quarterly Report on Form 10-Q (Filed with the SEC on May 15, 2002)
 10   10.21 Performance Units Agreement, dated January 2, 2002, by and between the Company and Daniel B. Hurwitz* Quarterly Report on Form 10-Q (Filed with the SEC on May 15, 2002)
 10   10.22 Amended and Restated Employment Agreement, dated December 29, 2008, by and between the Company and Joan U. Allgood* Filed herewith
 10   10.23 Amended and Restated Employment Agreement, dated December 29, 2008, by and between the Company and Richard E. Brown* Filed herewith
 10   10.24 Amended and Restated Employment Agreement, dated December 29, 2008, by and between the Company and Timothy J. Bruce* Filed herewith

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Exhibit No.
 Form 10-K
   Filed Herewith or
Under Reg.S-K
 Exhibit
   Incorporated Herein by
Item 601
 
No.
 
Description
 
Reference
 
 10   10.25 Employment Agreement, dated October 15, 2008, by and between the Company and Daniel B. Hurwitz* Current Report on Form 8-k (Filed with the SEC on October 21, 2008)
 10   10.26 Amended and Restated Employment Agreement, dated December 29, 2008, by and between the Company and David M. Jacobstein* Filed herewith
 10   10.27 Amended and Restated Employment Agreement, dated December 29, 2008, by and between the Company and David J. Oakes* Filed herewith
 10   10.28 Amended and Restated Employment Agreement, dated December 29, 2008, by and between the Company and William H. Schafer* Filed herewith
 10   10.29 Amended and Restated Employment Agreement, dated December 29, 2008, by and between the Company and Robin R. Walker-Gibbons* Filed herewith
 10   10.30 Employment Agreement, dated October 15, 2008, by and between the Company and Scott A. Wolstein* Current Report on Form 8-k (Filed with the SEC on October 21, 2008)
 10   10.31 Amended and Restated Employment Agreement, dated December 29, 2008, by and between the Company and John S. Kokinchak* Filed herewith
 10   10.32 Employment Agreement, dated December 29, 2008, by and between the Company and Paul Freddo* Filed herewith
 10   10.33 Change in Control Agreement, dated October 15, 2008, by and between the Company and Scott A. Wolstein* Current Report on Form 8-k (Filed with the SEC on October 21, 2008)
 10   10.34 Change in Control Agreement, dated October 15, 2008, by and between the Company and Daniel B. Hurwitz* Current Report on Form 8-k (Filed with the SEC on October 21, 2008)
 10   10.35 Amended and Restated Change in Control Agreement, dated December 29, 2008, by and between the Company and David M. Jacobstein* Filed herewith
 10   10.36 Form of Change in Control Agreement, entered into with certain officers of the Company* Filed herewith
 10   10.37 Outperformance Long-Term Incentive Plan Agreement, dated August 18, 2006, by and between the Company and Scott A. Wolstein* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.38 Outperformance Long-Term Incentive Plan Agreement, dated August 18, 2006, by and between the Company and Daniel B. Hurwitz* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.39 Outperformance Long-Term Incentive Plan Agreement, dated February 23, 2006, by and between the Company and Joan U. Allgood* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.40 Outperformance Long-Term Incentive Plan Agreement, dated February 23, 2006, by and between the Company and Richard E. Brown* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)

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Exhibit No.
 Form 10-K
   Filed Herewith or
Under Reg.S-K
 Exhibit
   Incorporated Herein by
Item 601
 
No.
 
Description
 
Reference
 
 10   10.41 Outperformance Long-Term Incentive Plan Agreement, dated February 23, 2006, by and between the Company and Timothy J. Bruce* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.42 Outperformance Long-Term Incentive Plan Agreement, dated February 23, 2006, by and between the Company and William H. Schafer* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.43 Outperformance Long-Term Incentive Plan Agreement, dated February 23, 2006, by and between the Company and Robin R. Walker-Gibbons* Quarterly Report on Form 10-Q (Filed with the SEC on November 9, 2006)
 10   10.44 Form of Medium-Term Note Distribution Agreement Annual Report on Form 10-K (Filed with the SEC on March 30, 2000; File No.
          001-11690)
 10   10.45 Program Agreement for Retail Value Investment Program, dated February 11, 1998, by and among Retail Value Management, Ltd., the Company and The Prudential Insurance Company of America Annual Report on Form 10-K (Filed with the SEC on March 15, 2004)
 10   10.46 Developers Diversified Realty Corporation 2005 Directors’ Deferred Compensation Plan* Form S-8 Registration No. 333-147270 (Filed with the SEC on November 9, 2007)
 14   14.1 Developers Diversified Realty Corporation Code of Ethics for Senior Financial Officers Annual Report on Form 10-K (Filed with the SEC on March 15, 2004)
 21   21.1 List of Subsidiaries Filed herewith
 23   23.1 Consent of PricewaterhouseCoopers LLP Filed herewith
 23   23.2 Consent of PricewaterhouseCoopers LLP (TRT DDR Venture I General Partnership) Annual Report on Form 10-K (Filed with the SEC on February 29, 2008)
 23   23.3 Consent of PricewaterhouseCoopers LLP (DDRTC Core Retail Fund, LLC) Filed herewith
 23   23.4 Consent of PricewaterhouseCoopers (Macquarie DDR Trust) Filed herewith
 31   31.1 Certification of principal executive officer pursuant toRule 13a-14(a)of the Securities Exchange Act of 1934 Filed herewith
 31   31.2 Certification of principal financial officer pursuant toRule 13a-14(a)of the Securities Exchange Act of 1934 Filed herewith
 32   32.1 Certification of chief executive officer pursuant toRule 13a-14(b)of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 Filed herewith
 32   32.2 Certification of chief financial officer pursuant toRule 13a-14(b)of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 Filed herewith
 99   99.1 TRT DDR Venture I General Partnership Consolidated Financial Statements Annual Report on Form 10-K (Filed with the SEC on February 29, 2008)
 99   99.2 DDRTC Core Retail Fund, LLC Consolidated Financial Statements Filed herewith
 99   99.3 Macquarie DDR Trust Consolidated Financial Statements Filed herewith
 
 
*Management contracts and compensatory plans or arrangements required to be filed as an exhibit pursuant to Item 15(b) ofForm 10-K.

153

 

DEVELOPERS DIVERSIFIED REALTY CORPORATION
 
INDEX TO FINANCIAL STATEMENTS
 
     
  Page
 
Financial Statements:
    
Report of Independent Registered Public Accounting Firm
  F-2 
Consolidated Balance Sheets at December 31, 2008 and 2007
  F-3 
Consolidated Statements of Operations for the three years ended December 31, 2008
  F-4 
Consolidated Statements of Shareholders’ Equity for the three years ended December 31, 2008
  F-5 
Consolidated Statements of Cash Flows for the three years ended December 31, 2008
  F-6 
Notes to Consolidated Financial Statements
  F-7 
Financial Statement Schedules:
    
II — Valuation and Qualifying Accounts and Reserves for the three years ended December 31, 2008
  F-60 
III — Real Estate and Accumulated Depreciation at December 31, 2008
  F-61 
IV — Mortgage Loans on Real Estate at December 31, 2008
  F-74 
 EX-10.5
 EX-10.22
 EX-10.23
 EX-10.24
 EX-10.26
 EX-10.27
 EX-10.28
 EX-10.29
 EX-10.31
 EX-10.32
 EX-10.35
 EX-10.36
 EX-21.1
 EX-23.1
 EX-23.3
 EX-23.4
 EX-31.1
 EX-31.2
 EX-32.1
 EX-32.2
 EX-99.2
 EX-99.3
 
All other schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.
 
Financial statements of the Company’s unconsolidated joint venture companies, except for DDRTC Core Retail Fund LLC, Macquarie DDR Trust and TRT DDR Venture I General Partnership, have been omitted because they do not meet the significant subsidiary definition of S-X 210.1-02(w).


F-1

Table of Contents

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and Shareholders of
Developers Diversified Realty Corporation:
 
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of Developers Diversified Realty Corporation and its subsidiaries at December 31, 2008, and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the index appearing under Item 15(a)(2) present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedules, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting” appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedules, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
 
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
/s/  
PRICEWATERHOUSECOOPERS LLP
 
Cleveland, Ohio
February 27, 2009


F-2

Table of Contents

 
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 
         
  December 31, 
  2008  2007 
 
Assets
        
Land
 $2,073,947  $2,142,942 
Buildings
  5,890,332   5,933,890 
Fixtures and tenant improvements
  262,809   237,117 
         
   8,227,088   8,313,949 
Less: Accumulated depreciation
  (1,208,903)  (1,024,048)
         
   7,018,185   7,289,901 
Construction in progress and land under development
  879,547   664,926 
Real estate held for sale
  —   5,796 
         
   7,897,732   7,960,623 
Investments in and advances to joint ventures
  583,767   638,111 
Cash and cash equivalents
  29,494   49,547 
Restricted cash
  111,792   58,958 
Accounts receivable, net
  164,356   199,354 
Notes receivable
  75,781   18,557 
Deferred charges, net
  26,613   31,172 
Other assets
  128,790   133,494 
         
  $9,018,325  $9,089,816 
         
Liabilities and Shareholders’ Equity
        
Unsecured indebtedness:
        
Senior notes
 $2,452,741  $2,622,219 
Revolving credit facility
  1,027,183   709,459 
         
   3,479,924   3,331,678 
Secured indebtedness:
        
Term debt
  800,000   800,000 
Mortgage and other secured indebtedness
  1,637,440   1,459,336 
         
   2,437,440   2,259,336 
         
Total indebtedness
  5,917,364   5,591,014 
Accounts payable and accrued expenses
  169,014   141,629 
Dividends payable
  6,967   85,851 
Other liabilities
  112,165   143,616 
         
   6,205,510   5,962,110 
         
Minority equity interests
  120,120   111,767 
Operating partnership minority interests
  8,010   17,114 
         
   6,333,640   6,090,991 
Commitments and contingencies (Note 11)
        
Shareholders’ equity:
        
Preferred shares (Note 12)
  555,000   555,000 
Common shares, with par value, $0.10 stated value; 300,000,000 shares authorized; 128,642,765 and 126,793,684 shares issued at December 31, 2008 and 2007, respectively
  12,864   12,679 
Paid-in-capital
  2,770,194   3,029,176 
Accumulated distributions in excess of net income
  (608,675)  (260,018)
Deferred compensation obligation
  13,882   22,862 
Accumulated other comprehensive (loss) income
  (49,849)  8,965 
Less: Common shares in treasury at cost: 224,063 and 7,345,304 shares at December 31, 2008 and 2007, respectively
  (8,731)  (369,839)
         
   2,684,685   2,998,825 
         
  $9,018,325  $9,089,816 
         
 
The accompanying notes are an integral part of these consolidated financial statements.


F-3

Table of Contents

 
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Revenues from operations:
            
Minimum rents
 $628,664  $635,415  $529,204 
Percentage and overage rents
  9,414   10,540   10,627 
Recoveries from tenants
  198,919   203,126   168,935 
Ancillary and other property income
  22,294   19,518   19,434 
Management fees, development fees and other fee income
  62,890   50,840   30,294 
Other
  9,291   13,697   14,857 
             
   931,472   933,136   773,351 
             
Rental operation expenses:
            
Operating and maintenance
  146,346   131,409   106,015 
Real estate taxes
  110,773   107,428   89,505 
Impairment charges
  79,864   —   — 
General and administrative
  97,719   81,244   60,679 
Depreciation and amortization
  242,032   214,445   180,377 
             
   676,734   534,526   436,576 
             
Other income (expense):
            
Interest income
  5,473   8,772   9,050 
Interest expense
  (244,212)  (258,149)  (208,536)
Gain on repurchase of senior notes
  11,552   —   — 
Abandoned projects and transaction costs
  (12,433)  —   — 
Other expense, net
  (15,819)  (3,019)  (446)
             
   (255,439)  (252,396)  (199,932)
             
(Loss) income before equity in net income of joint ventures, impairment of joint venture investments, minority interests, tax benefit of taxable REIT subsidiaries and franchise taxes, discontinued operations and gain on disposition of real estate, net of tax
  (701)  146,214   136,843 
Equity in net income of joint ventures
  17,719   43,229   30,337 
Impairment of joint venture investments
  (106,957)  —   — 
             
(Loss) income before minority interests, tax benefit of taxable REIT subsidiaries and franchise taxes, discontinued operations and gain on disposition of real estate
  (89,939)  189,443   167,180 
Minority interests:
            
Minority equity interests
  12,333   (6,253)  (6,777)
Preferred operating partnership minority interests
  —   (9,690)  — 
Operating partnership minority interests
  (1,145)  (2,275)  (2,116)
             
   11,188   (18,218)  (8,893)
Tax benefit of taxable REIT subsidiaries and franchise taxes
  17,434   14,669   2,497 
             
(Loss) income from continuing operations
  (61,317)  185,894   160,784 
             
Discontinued operations:
            
Income from discontinued operations
  1,409   9,043   9,406 
(Loss) gain on disposition of real estate, net of tax
  (4,830)  12,259   11,051 
             
   (3,421)  21,302   20,457 
             
(Loss) income before gain on disposition of real estate
  (64,738)  207,196   181,241 
Gain on disposition of real estate, net of tax
  6,962   68,851   72,023 
             
Net (loss) income
 $(57,776) $276,047  $253,264 
             
Preferred dividends
  42,269   50,934   55,169 
             
Net (loss) income applicable to common shareholders
 $(100,045) $225,113  $198,095 
             
Per share data:
            
Basic earnings per share data:
            
(Loss) income from continuing operations
 $(0.80) $1.68  $1.63 
(Loss) income from discontinued operations
  (0.03)  0.18   0.19 
             
Net (loss) income applicable to common shareholders
 $(0.83) $1.86  $1.82 
             
Diluted earnings per share data:
            
(Loss) income from continuing operations
 $(0.80) $1.67  $1.62 
(Loss) income from discontinued operations
  (0.03)  0.18   0.19 
             
Net (loss) income applicable to common shareholders
 $(0.83) $1.85  $1.81 
             
Dividends declared per common share
 $2.07  $2.64  $2.36 
             
 
The accompanying notes are an integral part of these consolidated financial statements.


F-4

Table of Contents

 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except per share amounts)
 
                                     
           Accumulated
     Accumulated
  Unearned
       
           Distributions in
  Deferred
  Other
  Compensation-
  Treasury
    
  Preferred
  Common
  Paid-in-
  Excess of
  Compensation
  Comprehensive
  Restricted
  Stock at
    
  Shares  Shares  Capital  Net Income  Obligation  Income/(Loss)  Stock  Cost  Total 
 
Balance, December 31, 2005
 $705,000  $10,895  $1,945,245  $(99,756) $11,616  $10,425  $(13,144) $—  $2,570,281 
Issuance of 726,574 common shares for cash related to exercise of stock options, dividend reinvestment plan and director compensation
  —   28   (1,819)  —   —   —   —   10,028   8,237 
Redemption of operating partnership units in exchange for common shares
  —   45   22,371   —   —   —   —   —   22,416 
Repurchase of 909,000 common shares
  —   —   —   —   —   —   —   (48,313)  (48,313)
Issuance of 64,940 common shares related to restricted stock plan
  —   6   653   —   —   —   —   (150)  509 
Vesting of restricted stock
  —   —   1,628   —   770   —   —   (1,585)  813 
Purchased option arrangement on common shares
  —   —   (10,337)  —   —   —   —   —   (10,337)
Adoption of SFAS 123(R)
  —   —   (1,558)  —   —   —   13,144   —   11,586 
Stock-based compensation
  —   —   3,446   —   —   —   —   —   3,446 
Dividends declared-common shares
  —   —   —   (257,954)  —   —   —   —   (257,954)
Dividends declared-preferred shares
  —   —   —   (55,169)  —   —   —   —   (55,169)
Comprehensive income (Note 16):
                                    
Net income
  —   —   —   253,264   —   —   —   —   253,264 
Other comprehensive income:
                                    
Change in fair value of interest rate contracts
  —   —   —   —   —   (2,729)  —   —   (2,729)
Amortization of interest rate contracts
  —   —   —   —   —   (1,454)  —   —   (1,454)
Foreign currency translation
  —   —   —   —   —   1,587   —   —   1,587 
                                     
Comprehensive income
  —   —   —   253,264   —   (2,596)  —   —   250,668 
                                     
Balance, December 31, 2006
  705,000   10,974   1,959,629   (159,615)  12,386   7,829   —   (40,020)  2,496,183 
Issuance of 69,964 common shares related to the exercise of stock options, dividend reinvestment plan, performance plan and director compensation
  —   —   (28,326)  —   3,739   —   —   33,059   8,472 
Issuance of 11,599,134 common shares for cash-underwritten offering
  —   1,160   745,485   —   —   —   —   —   746,645 
Issuance of 5,385,324 common shares associated with the IRRETI merger
  —   539   378,580   —   —   —   —   15,041   394,160 
Repurchase of common shares
  —   —   —   —   —   —   —   (378,942)  (378,942)
Issuance of restricted stock
  —   6   (674)  —   487   —   —   1,459   1,278 
Vesting of restricted stock
  —   —   (3,567)  —   6,250   —   —   (436)  2,247 
Purchased option arrangement on common shares
  —   —   (32,580)  —   —   —   —   —   (32,580)
Redemption of preferred shares
  (150,000)  —   5,405   (5,405)  —   —   —   —   (150,000)
Stock-based compensation
  —   —   5,224   —   —   —   —   —   5,224 
Dividends declared-common shares
  —   —   —   (324,907)  —   —   —   —   (324,907)
Dividends declared-preferred shares
  —   —   —   (46,138)  —   —   —   —   (46,138)
Comprehensive income (Note 16):
                                    
Net income
  —   —   —   276,047   —   —   —   —   276,047 
Other comprehensive income:
                                    
Change in fair value of interest rate contracts
  —   —   —   —   —   (20,126)  —   —   (20,126)
Amortization of interest rate contracts
  —   —   —   —   —   (1,454)  —   —   (1,454)
Foreign currency translation
  —   —   —   —   —   22,716   —   —   22,716 
                                     
Comprehensive income
  —   —   —   276,047   —   1,136   —   —   277,183 
                                     
Balance, December 31, 2007
  555,000   12,679   3,029,176   (260,018)  22,862   8,965   —   (369,839)  2,998,825 
Issuance of 8,142 common shares related to exercise of stock options, dividend reinvestment plan, performance plan and director compensation
  —   1   (2,671)  —   702   —   —   8,711   6,741 
Issuance of 1,840,939 common shares for cash-underwritten offering
  —   184   (286,220)  —   —   —   —   327,387   41,352 
Issuance of restricted stock
  —   —   (5,681)  —   4,289   —   —   6,578   5,187 
Vesting of restricted stock
  —   —   16,745   —   (13,971)  —   —   (4,895)  (2,121)
Stock-based compensation
  —   —   24,017   —   —   —   —   —   24,017 
Redemption of 463,185 operating partnership units in exchange for common shares
  —   —   (5,172)  —   —   —   —   23,327   18,155 
Dividends declared-common shares
  —   —   —   (248,612)  —   —   —   —   (248,612)
Dividends declared-preferred shares
  —   —   —   (42,269)  —   —   —   —   (42,269)
Comprehensive loss (Note 16):
                                    
Net loss
  —   —   —   (57,776)  —   —   —   —   (57,776)
Other comprehensive income:
                                    
Change in fair value of interest rate contracts
  —   —   —   —   —   (13,293)  —   —   (13,293)
Amortization of interest rate contracts
  —   —   —   —   —   (643)  —   —   (643)
Foreign currency translation
  —   —   —   —   —   (44,878)  —   —   (44,878)
                                     
Comprehensive loss
  —   —   —   (57,776)  —   (58,814)  —   —   (116,590)
                                     
Balance, December 31, 2008
 $555,000  $12,864  $2,770,194  $(608,675) $13,882  $(49,849) $—  $(8,731) $2,684,685 
                                     
 
The accompanying notes are an integral part of these consolidated financial statements.


F-5

Table of Contents

 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Cash flow from operating activities:
            
Net (loss) income
 $(57,776) $276,047  $253,264 
Adjustments to reconcile net income to net cash flow provided by operating activities:
            
Depreciation and amortization
  246,374   224,375   193,527 
Stock-based compensation
  27,970   5,224   3,446 
Amortization of deferred finance costs and settled interest rate protection agreements
  10,292   9,750   7,756 
Ineffective portion of derivative financing investments
  —   —   1,157 
Net cash paid from interest rate hedging contracts
  (5,410)        
Equity in net income of joint ventures
  (17,719)  (43,229)  (30,337)
Impairment of joint venture investments
  106,957   —   — 
Cash distributions from joint ventures
  24,427   33,362   23,304 
Operating partnership minority interest expense
  1,145   2,275   2,116 
Preferred operating partnership minority interest expense
  —   9,690   — 
Gain on disposition of real estate
  (2,132)  (81,110)  (83,074)
Impairment charge, net of minority interest
  67,614   —   — 
Net change in accounts receivable
  (1,215)  (47,999)  (38,013)
Net change in accounts payable and accrued expenses
  44,244   (11,955)  9,875 
Net change in other operating assets and liabilities
  (20,203)  38,186   (2,329)
             
Total adjustments
  482,344   138,569   87,428 
             
Net cash flow provided by operating activities
  424,568   414,616   340,692 
             
Cash flow from investing activities:
            
Real estate developed or acquired, net of liabilities assumed
  (394,332)  (2,789,132)  (454,357)
Equity contributions to joint ventures
  (98,113)  (247,882)  (206,645)
(Advances to) repayment of joint venture advances, net
  (56,926)  1,913   622 
Proceeds resulting from contribution of properties to joint ventures and repayments of advances from affiliates
  —   1,274,679   298,059 
Proceeds from sale and refinancing of joint venture interests
  12,154   43,041   — 
Return on investments in joint ventures
  28,211   20,462   50,862 
(Issuance) repayment of notes receivable, net
  (36,047)  1,014   6,834 
Increase in restricted cash
  (52,834)  (58,958)  — 
Proceeds from disposition of real estate
  133,546   606,547   101,578 
             
Net cash flow used for investing activities
  (464,341)  (1,148,316)  (203,047)
             
Cash flow from financing activities:
            
Proceeds from revolving credit facilities, net
  343,201   412,436   147,500 
Proceeds from term loan borrowings
  —   1,150,000   — 
Repayment of term loans
  —   (750,000)  (20,000)
Proceeds from mortgage and other secured debt
  466,936   134,300   11,093 
Principal payments on mortgage debt
  (306,309)  (401,697)  (153,732)
Repayment of senior notes
  (170,332)  (197,000)  — 
Proceeds from issuance of convertible senior notes, net of underwriting commissions and offering expenses of $267 and $550 in 2007 and 2006, respectively
  —   587,733   244,450 
Payment of deferred finance costs
  (5,522)  (5,337)  (4,047)
Redemption of preferred shares
  —   (150,000)  — 
Proceeds from issuance of common shares, net of underwriting commissions and offering expenses paid of $208 in 2007
  41,352   746,645   — 
Payment of underwriting commissions for forward-equity contract
  —   (32,580)  (4,000)
Purchased option arrangement for common shares
  —   —   (10,337)
Proceeds from the issuance of common shares in conjunction with exercise of stock options, 401(k) plan and dividend reinvestment plan
  1,371   11,998   9,560 
Proceeds from issuance of preferred operating partnership interest, net of expenses
  —   484,204   — 
Redemption of preferred operating partnership interest
  —   (484,204)  — 
Contribution from minority interest shareholders
  28,487   —   — 
Return of investment — minority interest shareholders
  (4,970)  (4,261)  — 
Purchase of operating partnership minority interests
  (46)  (683)  (2,097)
Distributions to preferred and operating partnership minority interests
  (1,705)  (11,907)  (2,347)
Repurchase of common shares
  —   (378,942)  (48,313)
Net cash received from foreign currency hedge contract
  —   1,250   — 
Dividends paid
  (369,765)  (356,464)  (307,652)
             
Net cash provided by (used for) financing activities
  22,698   755,491   (139,922)
             
Cash and cash equivalents
            
(Decrease) increase in cash and cash equivalents
  (17,075)  21,791   (2,277)
Effect of exchange rate changes on cash and cash equivalents
  (2,978)  (622)  — 
Cash and cash equivalents, beginning of year
  49,547   28,378   30,655 
             
Cash and cash equivalents, end of year
 $29,494  $49,547  $28,378 
             
 
The accompanying notes are an integral part of these consolidated financial statements.


F-6

Table of Contents

 
Notes to Consolidated Financial Statements
 
1.  Summary of Significant Accounting Policies
 
Nature of Business
 
Developers Diversified Realty Corporation and its related real estate joint ventures and subsidiaries (collectively, the “Company” or “DDR”) are primarily engaged in the business of acquiring, expanding, owning, developing, redeveloping, leasing, managing and operating shopping centers and enclosed malls. The Company’s shopping centers are typically anchored by two or more national tenant anchors (Wal-Mart and Target), home improvement stores (Home Depot or Lowe’s Home Improvement) and two or more junior tenants (Bed Bath & Beyond, Kohl’s, T.J. Maxx or PetSmart). At December 31, 2008, the Company owned or had interests in 702 shopping centers in 45 states plus Puerto Rico and Brazil, and six business centers in four states. The Company has an interest in 329 of these shopping centers through equity method investments. The Company also had assets under development in Canada and Russia. The tenant base primarily includes national and regional retail chains and local retailers. Consequently, the Company’s credit risk is concentrated in the retail industry.
 
Consolidated revenues derived from the Company’s largest tenant, Wal-Mart, aggregated 4.5%, 4.3% and 4.7% of total revenues for the years ended December 31, 2008, 2007 and 2006, respectively. The total percentage of Company-owned gross leasable area (“GLA”) (all references are unaudited) attributed to Wal-Mart was 8.6% at December 31, 2008. The Company’s 10 largest tenants constituted 20.0%, 18.5% and 17.7% of total revenues for the years ended December 31, 2008, 2007 and 2006, respectively, including revenues reported within discontinued operations. Management believes the Company’s portfolio is diversified in terms of the location of its shopping centers and its tenant profile. Adverse changes in general or local economic conditions could result in the inability of some existing tenants to meet their lease obligations and could adversely affect the Company’s ability to attract or retain tenants. During the three years ended December 31, 2008, 2007 and 2006, certain national and regional retailers experienced financial difficulties, and several filed for protection under bankruptcy laws, including Mervyns and Circuit City which, as of December 31, 2008, represented approximately 4.2% and 1.2%, respectively, of the Company’s total revenues.
 
Principles of Consolidation
 
The Company consolidates certain entities in which it owns less than a 100% equity interest if the entity is a variable interest entity (“VIE”), as defined in Financial Accounting Standards Board (“FASB”) Interpretation No. 46(R) “Consolidation of Variable Interest Entities” (“FIN 46(R)”), and the Company is deemed to be the primary beneficiary in the VIE. The Company also consolidates certain entities that are not a VIE as defined in FIN 46(R) in which it has effective control. The Company consolidates one entity pursuant to the provisions of Emerging Issues Task Force (“EITF”)04-05,“Investor’s Accounting for an Investment in a Limited Partnership When the Investor Is the Sole General Partner and the Limited Partners Have Certain Rights.” The equity method of accounting is applied to entities in which the Company is not the primary beneficiary as defined by FIN 46(R), or does not have effective control, but can exercise significant influence over the entity with respect to its operations and major decisions. See Note 2 for a discussion of one significant joint venture that is considered a VIE but for which the Company is not considered the primary beneficiary.
 
In 2005, the Company formed a joint venture with Macquarie DDR Trust (Note 2) and DDR MDT MV LLC (“MV LLC”) that acquired the underlying real estate of 37 operating Mervyns stores. DDR provides management, financing, expansion, re-tenanting and oversight services for these real estate investments. The Company holds a 50% economic interest in MV LLC, which is considered a VIE. The Company was determined to be the primary beneficiary due to related party considerations, as defined in FIN 46(R), as well as being the member determined to have a greater exposure to variability in expected losses as DDR is entitled to earn certain fees from the joint venture. DDR earned aggregate fees of $1.4 million and $1.3 million during 2008 and 2007, respectively. MV LLC had total real estate assets of $348.5 million and $405.8 million at December 31, 2008 and 2007, respectively, and total non-recourse mortgage debt of $258.5 million at December 31, 2008 and 2007, and is consolidated in the results of the Company. All fees earned from the joint venture are eliminated in consolidation.


F-7

Table of Contents

Statement of Cash Flows and Supplemental Disclosure of Non-Cash Investing and Financing Information
 
Non-cash investing and financing activities are summarized as follows (in millions):
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Contribution of net assets of previously unconsolidated joint ventures
 $—  $—  $2.9 
Consolidation of the net assets (excluding mortgages as disclosed below) of previously unconsolidated joint ventures
  —   14.4   368.9 
Mortgages assumed, shopping center acquisitions and consolidation of previously unconsolidated joint ventures
  17.5   446.5   132.9 
Liabilities assumed with the acquisition of shopping centers
  —   32.5   — 
Consolidation of net assets from adoption of EITF04-05
  —   —   43.0 
Mortgages assumed, adoption of EITF04-05
  —   —   17.1 
Dividends declared, not paid
  7.0   85.9   71.3 
Fair value of interest rate swaps
  21.7   20.1   1.1 
Deferred payment of swaption
  —   —   2.8 
Share issuance for operating partnership unit redemption
  9.1   —   14.9 
 
The transactions above did not provide or use cash in the years presented and, accordingly, are not reflected in the consolidated statements of cash flows.
 
Real Estate
 
Real estate assets held for investment are stated at cost less accumulated depreciation, which, in the opinion of management, is not in excess of the individual property’s estimated undiscounted future cash flows, including estimated proceeds from disposition.
 
Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets as follows:
 
   
Buildings
 Useful lives, ranging from 30 to 40 years
Building improvements
 Useful lives, ranging from five to 40 years
Fixtures and tenant improvements
 Useful lives, which approximate lease terms, where applicable
 
Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations that improve or extend the life of the asset are capitalized. Included in land at December 31, 2008, was undeveloped real estate, generally outlots or expansion pads adjacent to shopping centers owned by the Company (excluding shopping centers owned through unconsolidated joint ventures), and excess land of approximately 1,300 acres.
 
Construction in progress includes shopping center developments and significant expansions and redevelopments. The Company capitalizes interest on funds used for the construction, expansion or redevelopment of shopping centers, including funds invested in or advanced to unconsolidated joint ventures with qualifying development activities. Capitalization of interest ceases when construction activities are substantially completed and the property is available for occupancy by tenants or when construction activities are temporarily ceased. If the Company suspends substantially all activities related to development of a qualifying asset, the Company will cease capitalization of interest until activities are resumed. In addition, the Company capitalized certain direct and incremental internal construction and software development and implementation costs of $14.6 million, $12.8 million and $10.0 million in 2008, 2007 and 2006, respectively.
 
Purchase Price Accounting
 
Upon acquisition of properties, the Company estimates the fair value of acquired tangible assets, consisting of land, building and improvements, and, if determined to be material, identifies intangible assets generally consisting


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of the fair value of (i) above- and below-market leases, (ii) in-place leases and (iii) tenant relationships. The Company allocates the purchase price to assets acquired and liabilities assumed based on their relative fair values at the date of acquisition pursuant to the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations.” In estimating the fair value of the tangible and intangible assets acquired, the Company considers information obtained about each property as a result of its due diligence, marketing and leasing activities, and utilizes various valuation methods, such as estimated cash flow projections using appropriate discount and capitalization rates, estimates of replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.
 
Above- and below-market lease values for acquired properties are recorded based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values are amortized as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases. At December 31, 2008 and 2007, below-market leases aggregated $28.8 million and $31.3 million, respectively. At December 31, 2008 and 2007, above-market leases aggregated $9.1 million and $9.8 million, respectively.
 
The total amount allocated to in-place lease values and tenant relationship values is based upon management’s evaluation of the specific characteristics of the acquired lease portfolio and the Company’s overall relationship with anchor tenants. Factors considered in the allocation of these values include the nature of the existing relationship with the tenant, the expectation of lease renewals, the estimated carrying costs of the property during a hypothetical, expectedlease-upperiod, current market conditions and costs to execute similar leases. Estimated carrying costs include real estate taxes, insurance, other property operating costs and estimates of lost rentals at market rates during the hypothetical, expectedlease-upperiods, based upon management’s assessment of specific market conditions.
 
The value of in-place leases, including origination costs, is amortized over the estimated weighted average remaining initial term of the acquired lease portfolio. The value of tenant relationship intangibles is amortized to expense over the estimated initial and renewal terms of the lease portfolio; however, no amortization period for intangible assets will exceed the remaining depreciable life of the building.
 
Intangible assets associated with property acquisitions are included in other assets and other liabilities, with respect to the above- and below-market leases, in the Company’s consolidated balance sheets.
 
Impairment of Long-Lived Assets
 
The Company follows the provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). If an asset is held for sale, it is stated at the lower of its carrying value or fair value, less cost to sell. The determination of undiscounted cash flows requires significant estimates made by management and considers the expected course of action at the balance sheet date. Subsequent changes in estimated undiscounted cash flows arising from changes in anticipated actions could affect the determination of whether an impairment exists.
 
The Company reviews its long-lived assets used in operations for impairment when there is an event or change in circumstances that indicates an impairment in value. The Company reviews its real estate assets, including land held for development and developments in progress, for potential impairment indicators whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income and occupancy percentages as well as projected losses on expected future sales. Impairment indicators for pre-development projects, which typically include costs incurred during the beginning stages of a potential development, and developments in progress are assessed by project and include, but are not limited to,


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significant changes in projected completion dates, revenues or cash flows, development costs, market factors and sustainability of development projects. An asset is considered impaired when the undiscounted future cash flows are not sufficient to recover the asset’s carrying value. If such impairment is present, an impairment loss is recognized based on the excess of the carrying amount of the asset over its fair value. The Company records impairment losses as an expense to operations and reduces the carrying amounts of assets held for sale when the carrying amounts exceed the estimated selling proceeds, less the costs to sell.
 
Disposition of Real Estate and Real Estate Investments
 
Disposition of real estate relates to the sale of outlots and land adjacent to existing shopping centers, shopping center properties and real estate investments. Gains from dispositions are recognized using the full accrual or partial sale methods, as applicable, in accordance with the provisions of SFAS No. 66, “Accounting for Real Estate Sales” (“SFAS 66”) provided that various criteria relating to the terms of sale and any subsequent involvement by the Company with the properties sold are met.
 
SFAS 144 retains the basic provisions for presenting discontinued operations in the income statement but broadens the scope to include a component of an entity rather than a segment of a business. Pursuant to the definition of a component of an entity in SFAS 144, assuming no significant continuing involvement, the sale of a retail or industrial operating property is considered discontinued operations. In addition, properties classified as held for sale are also considered a discontinued operation. Accordingly, the results of operations of properties disposed of, or classified as held for sale, for which the Company has no significant continuing involvement, are reflected as discontinued operations. Interest expense, which is specifically identifiable to the property, is used in the computation of interest expense attributable to discontinued operations. Consolidated interest at the corporate level is allocated to discontinued operations pursuant to the methods prescribed under Emerging Issues Task Force (“EITF”)87-24,“Allocation of Interest to Discontinued Operations,” based on the proportion of net assets disposed.
 
Real Estate Held for Sale
 
The Company generally considers assets to be held for sale when the transaction has been approved by the appropriate level of management and there are no known significant contingencies relating to the sale such that the property sale within one year is considered probable. The Company evaluates the held for sale classification of its owned real estate each quarter. Assets that are classified as held for sale are recorded at the lower of their carrying amount or fair value less cost to sell. If the Company is not expected to have any significant continuing involvement following the sale, the results of operations of these shopping centers are reflected as discontinued operations in all periods presented.
 
The Company frequently sells assets from its portfolio and, on occasion, will receive unsolicited offers from third parties to buy individual shopping centers. The Company will generally classify properties as held for sale when a sales contract is executed with no contingencies and the prospective buyer has significant funds at risk to ensure performance.
 
Interest and Real Estate Taxes
 
Interest and real estate taxes incurred during the development and significant expansion of real estate assets are capitalized and depreciated over the estimated useful life of the building. The Company will cease the capitalization of these expenses when assets are placed in service or upon the temporary suspension of construction. If the Company suspends substantially all activities related to development of a qualifying asset, the Company will cease capitalization of interest, insurance, and taxes until activities are resumed. Interest paid during the years ended December 31, 2008, 2007 and 2006, aggregated $281.4 million, $296.6 million and $239.3 million, respectively, of which $39.2 million, $26.9 million and $20.0 million, respectively, was capitalized.
 
Investments in and Advances to Joint Ventures
 
To the extent that the Company contributes assets to an unconsolidated joint venture, the Company’s investment in the joint venture is recorded at the Company’s cost basis in the assets that were contributed to the joint venture. To the extent that the Company’s cost basis is different from the basis reflected at the joint venture


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level, the basis difference is amortized over the life of the related assets and included in the Company’s share of equity in net income of the joint venture. In accordance with the provisions of SFAS 66 and Statement of Position78-9,“Accounting for Investments in Real Estate Ventures,” paragraph 30, the Company recognizes gains on the contribution of real estate to unconsolidated joint ventures, relating solely to the outside partner’s interest, to the extent the economic substance of the transaction is a sale.
 
On a periodic basis, management assesses whether there are any indicators that the value of the Company’s investments in unconsolidated joint ventures may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment and such difference is deemed to be other than temporary pursuant to Accounting Principles Board Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock” (“APB 18”). As disclosed in Note 14, the Company recorded an aggregate impairment charge of approximately $107.0 million relating to its investments in unconsolidated joint ventures during the year ended December 31, 2008.
 
Goodwill is included in the consolidated balance sheet caption Investments in and Advances to Joint Ventures in the amount of $5.4 million as of December 31, 2008 and 2007. SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), requires that intangible assets not subject to amortization and goodwill be tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. Amortization of goodwill, including such assets associated with unconsolidated joint ventures acquired in past business combinations, ceased upon adoption of SFAS 142. The Company evaluated the goodwill related to its unconsolidated joint venture investments for impairment and determined that it was not impaired as of December 31, 2008 and 2007.
 
Cash and Cash Equivalents
 
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains cash deposits with major financial institutions, which from time to time may exceed federally insured limits. The Company periodically assesses the financial condition of these institutions and believes that the risk of loss is minimal. Cash flows associated with items intended as hedges of identifiable transactions or events are classified in the same category as the cash flows from the items being hedged.
 
Restricted Cash
 
Restricted Cash is comprised of the following (in thousands):
 
         
  December 31, 
  2008  2007 
 
DDR MDT MV LLC(1)
 $31,806  $— 
DDR MDT MV LLC(2)
  33,000   — 
Bond fund(3)
  46,986   58,958 
         
Total restricted cash
 $111,792  $58,958 
         
 
 
(1)MV LLC, which is consolidated by the Company, owns 37 locations formerly occupied by Mervyns. The terms of the original acquisition contained a contingent refundable purchase price adjustment secured by a $25.0 million letter of credit (“LOC”) from the seller of the real estate portfolio, which was owned in part by an affiliate of one of the members of the Company’s board of directors. In addition, MV LLC held a $7.7 million Security Deposit Letter of Credit (“SD LOC”) from Mervyns. These LOCs were drawn in full in 2008 due to Mervyns filing for protection under Chapter 11 of the United States Bankruptcy Code. Although the funds are required to be placed in escrow with MV LLC’s lender to secure the entity’s mortgage loan, these funds are available for re-tenanting expenses or to fund debt service. The funds will be released as the related leases are either assumed or released, or the debt is repaid. The balance at December 31, 2008, has been adjusted for a release of $1.1 million by the lender relating to unencumbered assets and an increase of $0.2 million in interest income.
 
(2)In connection with MV LLC’s draw of the $25.0 million LOC, MV LLC was required under the loan agreement to provide an additional $33.0 million as collateral security for the entity’s mortgage loan. DDR and MDT funded the escrow requirement with proportionate capital contributions. The funds will be released in the same manner as the $25.0 million LOC.


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(3)Under the terms of a bond issue by the Mississippi Business Finance Corporation, the proceeds of approximately $60.0 million from the sale of bonds were placed in a trust in connection with a Company development project in Mississippi. As construction is completed on the Company’s project in Mississippi, the Company will request disbursement of these funds.
 
Accounts Receivable
 
The Company makes estimates of the amounts that will not be collected of its accounts receivable related to base rents, expense reimbursements and other revenues. The Company analyzes accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims. The Company’s reported net income is directly affected by management’s estimate of the collectibility of accounts receivable.
 
Accounts receivable, other than straight-line rents receivable, are substantially expected to be collected within one year and are net of estimated unrecoverable amounts of approximately $30.3 million and $30.1 million at December 31, 2008 and 2007, respectively. At December 31, 2008 and 2007, straight-line rents receivable, net of a provision for uncollectible amounts of $3.3 million and $4.1 million, aggregated $53.8 million and $61.7 million, respectively.
 
Notes Receivables
 
Notes receivables include certain loans issued relating to real estate investments. Loan receivables are recorded at stated principal amounts. The Company defers certain loan origination and commitment fees, net of certain origination costs, and amortizes them over the term of the related loan. The Company evaluates the collectibility of both interest and principal on each loan to determine whether it is impaired. A loan is considered to be impaired when, based upon current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. When a loan is considered to be impaired, the amount of loss is calculated by comparing the recorded investment to the value of the underlying collateral. Interest income on performing loans is accrued as earned. Interest income on non-performing loans is generally recognized on a cost-recovery basis.
 
Deferred Charges
 
Costs incurred in obtaining indebtedness are included in deferred charges in the accompanying consolidated balance sheets and are amortized on a straight-line basis over the terms of the related debt agreements, which approximates the effective interest method. Such amortization is reflected as interest expense in the consolidated statements of operations.
 
Intangible Assets
 
In addition to the intangibles discussed above in purchase price accounting, the Company has finite-lived intangible assets, composed of management contracts associated with the Company’s acquisition of an unconsolidated joint venture, stated at cost less amortization calculated on a straight-line basis over 15 years. Intangible assets, net, are included in the balance sheet caption Investments in and Advances to Joint Ventures in the amount of $1.6 million and $1.9 million as of December 31, 2008 and 2007, respectively. The15-year life approximates the expected turnover rate of the original management contracts acquired. The estimated amortization expense associated with this intangible asset for each of the five succeeding fiscal years is approximately $0.3 million per year.
 
Revenue Recognition
 
Minimum rents from tenants are recognized using the straight-line method over the lease term of the respective leases. Percentage and overage rents are recognized after a tenant’s reported sales have exceeded the applicable sales breakpoint set forth in the applicable lease. Revenues associated with tenant reimbursements are recognized in the period that the expenses are incurred based upon the tenant lease provision. Management fees are recorded in the


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period earned based on a percentage of collected rent at the properties under management. Ancillary and other property-related income, which includes the leasing of vacant space to temporary tenants and kiosk income, is recognized in the period earned. Lease termination fees are included in other income and recognized upon the effective termination of a tenant’s lease when the Company has no further obligations under the lease. Fee income derived from the Company’s unconsolidated joint venture investments is recognized to the extent attributable to the unaffiliated ownership interest.
 
General and Administrative Expenses
 
General and administrative expenses include certain internal leasing and legal salaries and related expenses directly associated with the re-leasing of existing space, which are charged to operations as incurred.
 
Stock Option and Other Equity-Based Plans
 
The Company follows the provisions of SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”), an amendment of SFAS 123, which requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements based upon the grant date fair value. The grant date fair value of the portion of the restricted stock and performance unit awards issued prior to the adoption of SFAS 123(R) that is ultimately expected to vest is recognized as expense on a straight-line attribution basis over the requisite service periods in the Company’s consolidated financial statements. SFAS 123(R) requires forfeitures to be estimated at the time of grant in order to estimate the amount of share-based awards that will ultimately vest. The forfeiture rate is based on historical rates.
 
The Company adopted SFAS 123(R) as required on January 1, 2006, using the modified prospective method. The adoption of this standard changed the balance sheet and resulted in decreasing other liabilities and increasing shareholders’ equity by $11.6 million. In addition, unearned compensation — restricted stock (included in shareholders’ equity) of $13.1 million was eliminated and reclassified to paid in capital. These balance sheet changes relate to deferred compensation under the performance unit plans and unvested restricted stock awards. Under SFAS 123(R), deferred compensation is no longer recorded at the time unvested shares are issued.Share-basedcompensation expense is recognized over the requisite service period with an offsetting credit to equity.
 
The compensation cost recognized under SFAS 123(R) was $29.0 million (which includes a charge of $15.8 million related to the termination of an equity award plan), $11.0 million and $8.3 million for the years ended December 31, 2008, 2007 and 2006, respectively. For the years ended December 31, 2008 and 2007, the Company capitalized $0.4 million and $0.3 million of stock-based compensation, respectively. There were no significant capitalized stock-based compensation costs in 2006. See Note 18, “Benefit Plans,” for additional information.
 
Income Taxes
 
The Company has made an election to qualify, and believes it is operating so as to qualify, as a real estate investment trust (“REIT”) for federal income tax purposes. Accordingly, the Company generally will not be subject to federal income tax, provided that it makes distributions to its shareholders equal to at least the amount of its REIT taxable income as defined under Sections 856 through 860 of the Code.
 
In connection with the REIT Modernization Act, which became effective January 1, 2001, the Company is permitted to participate in certain activities that it was previously precluded from in order to maintain its qualification as a REIT, so long as these activities are conducted in entities that elect to be treated as taxable subsidiaries under the Code. As such, the Company is subject to federal and state income taxes on the income from these activities.
 
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.


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Foreign Currency Translation
 
The financial statements of several international consolidated and unconsolidated joint venture investments are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and an average exchange rate for each period for revenues, expenses, gains and losses, with the Company’s proportionate share of the resulting translation adjustments recorded as Accumulated Other Comprehensive Income (Loss). Gains or losses resulting from foreign currency transactions, translated to local currency, are included in income as incurred. Foreign currency gains or losses from changes in exchange rates were not material to the consolidated operating results.
 
Treasury Stock
 
The Company’s share repurchases are reflected as treasury stock utilizing the cost method of accounting and are presented as a reduction to consolidated shareholders’ equity. Reissuances of our treasury stock at an amount below cost are recorded as a charge to paid in capital due to the Company’s cumulative distributions in excess of net income.
 
Use of Estimates in Preparation of Financial Statements
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates.
 
New Accounting Standards Implemented
 
The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115 — SFAS 159
 
In February 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”), which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value on aninstrument-by-instrumentbasis, that are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes (i.e., unrealized gains and losses) in fair value must be recorded in earnings. Additionally, SFAS 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded to beginning retained earnings. The Company adopted SFAS 159 on January 1, 2008, and did not elect to measure any assets, liabilities or firm commitments at fair value.
 
Fair Value Measurements — SFAS 157
 
In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides guidance for using fair value to measure assets and liabilities. This statement clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing the asset or liability. SFAS 157 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data. SFAS 157 applies whenever other standards require assets or liabilities to be measured at fair value. SFAS 157 also provides for certain disclosure requirements, including, but not limited to, the valuation techniques used to measure fair value and a discussion of changes in valuation techniques, if any, during the period. The Company adopted this statement for disclosure requirements and its financial assets and liabilities, including valuations associated with the impairment assessment of unconsolidated joint ventures on January 1, 2008.
 
For nonfinancial assets and nonfinancial liabilities that are not recognized or disclosed at fair value on a recurring basis, the statement is effective for fiscal years beginning after November 15, 2008. The Company is currently evaluating the impact that this statement, for nonfinancial assets and liabilities, will have on its financial position and results of operations.


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FSPFAS 140-4and FIN 46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities
 
In December 2008, the FASB issued Staff Position (“FSP”)FAS No. 140-4and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities” (“FSPFAS 140-4”).The purpose of this FSP is to improve disclosures by public entities and enterprises until pending amendments to SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” (“SFAS 140”), and FIN 46(R) are finalized and approved by the FASB. The FSP amends SFAS 140 to require public entities to provide additional disclosures about transferors’ continuing involvements with transferred financial assets. It also amends FIN 46(R) to require public enterprises, to provide additional disclosures about their involvement with variable interest entities. FSPFAS 140-4and FIN 46(R)-8 is effective for financial statements issued for fiscal years and interim periods ending after December 15, 2008. For periods after the initial adoption date, comparative disclosures are required. The Company adopted the FSP and FIN 46(R)-8 on December 31, 2008.
 
Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active — FSPFAS 157-3
 
In October 2008, the FASB issued FSPFAS No. 157-3,“Fair Value Measurements” (“FSPFAS 157-3”),which clarifies the application of SFAS 157 in an inactive market and provides an example to demonstrate how the fair value of a financial asset is determined when the market for that financial asset is inactive. FSPFAS 157-3was effective upon issuance, including prior periods for which financial statements had not been issued. The adoption of this standard as of September 30, 2008, did not have a material impact on the Company’s financial position and results of operations.
 
New Accounting Standards to Be Implemented
 
Business Combinations — SFAS 141(R)
 
In December 2007, the FASB issued Statement No. 141 (revised 2007), “Business Combinations” (“SFAS 141(R)”). The objective of this statement is to improve the relevance, representative faithfulness and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To accomplish that, this statement establishes principles and requirements for how the acquirer: (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest of the acquiree, (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and (iii) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after December 15, 2008. Early adoption is not permitted. The Company adopted SFAS 141(R) on January 1, 2009. To the extent that the Company enters into new acquisitions in 2009 and beyond that qualify as businesses, this standard will require that acquisition costs and certain fees, which are currently capitalized and allocated to the basis of the acquisition, be expensed as these costs are incurred. Because of this change in accounting for costs, the Company expects that the adoption of this standard could have a negative impact on the Company’s results of operations depending on the size of a transaction and the amount of costs incurred. (The Company is currently assessing the impact, if any, the adoption of SFAS 141(R) will have on its financial position and results of operations.) The Company will assess the impact of significant transactions, if any, as they are contemplated.
 
Non-Controlling Interests in Consolidated Financial Statements — an Amendment of ARB No. 51 — SFAS 160
 
In December 2007, the FASB issued Statement No. 160, “Non-Controlling Interest in Consolidated Financial Statements — an Amendment of ARB No. 51” (“SFAS 160”). A non-controlling interest, sometimes called minority equity interest, is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. The objective of this statement is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and


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reporting standards that require: (i) the ownership interest in subsidiaries held by other parties other than the parent be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity; (ii) the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of operations; (iii) changes in a parent’s ownership interest while the parent retains its controlling financial interest in a subsidiary be accounted for consistently and requires that they be accounted for similarly, as equity transactions; (iv) when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary be initially measured at fair value (the gain or loss on the deconsolidation of the subsidiary is measured using the fair value of any non-controlling equity investments rather than the carrying amount of that retained investment) and (v) entities provide sufficient disclosures that clearly identify and distinguish between the interest of the parent and the interest of the non-controlling owners. This statement is effective for fiscal years, and interim reporting periods within those fiscal years, beginning on or after December 15, 2008, and is applied on a prospective basis. Early adoption is not permitted. The Company is currently assessing the impact, if any, the adoption of SFAS 160 will have on the Company’s financial position and results of operations.
 
Disclosures about Derivative Instruments and Hedging Activities — SFAS 161
 
In March 2008, the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”), which is intended to help investors better understand how derivative instruments and hedging activities affect an entity’s financial position, financial performance and cash flows through enhanced disclosure requirements. The enhanced disclosures primarily surround disclosing the objectives and strategies for using derivative instruments by their underlying risk as well as a tabular format of the fair values of the derivative instruments and their gains and losses. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company is currently assessing the impact, if any, that the adoption of SFAS 161 will have on its financial statement disclosures.
 
Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) — FSP APB14-1
 
In May 2008, the FASB issued a FSP, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB14-1”).FSP APB 14-1prohibits the classification of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, as debt instruments within the scope of FSP APB14-1 and requires issuers of such instruments to separately account for the liability and equity components by allocating the proceeds from the issuance of the instrument between the liability component and the embedded conversion option (i.e., the equity component). FSP APB14-1requires that the debt proceeds from the sale of $250 million of 3.5% convertible notes, due in 2011, and $600 million of 3.0% convertible notes, due in 2012, be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt. The difference between the principal amount of the debt and the amount of the proceeds allocated to the liability component are required to be reported as a debt discount and subsequently amortized to earnings over the instrument’s expected life using the interest method. As a result, the Company will report a lower net income as interest expense would be increased to include both the current period’s amortization of the debt discount and the instrument’s coupon interest. The adoption of FSP APB14-1 will result in the Company restating prior years and recording a charge to interest expense of approximately $14.9 million, $12.1 million and $1.3 million, respectively, and $0.12 per share (basic and diluted), $0.10 per share (basic and diluted) and $0.01 per share (basic and diluted), respectively, for the years ended December 31, 2008, 2007 and 2006, in future financial statements. FSP APB14-1 is effective for fiscal years beginning after December 15, 2008, and for interim periods within those fiscal years, with retrospective application required. Early adoption is not permitted.
 
Accounting for Transfers of Financial Assets and Repurchase Financing Transactions — FSPFAS 140-3
 
In February 2008, the FASB issued an FSP, “Accounting for Transfers of Financial Assets and Repurchase Financing Transactions” (“FSPFAS 140-3”).FSPFAS No. 140-3addresses the issue of whether or not these transactions should be viewed as two separate transactions or as one “linked” transaction. FSPFAS 140-3includes a


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“rebuttable presumption” linking the two transactions unless the presumption can be overcome by meeting certain criteria. FSPFAS 140-3is effective for fiscal years beginning after November 15, 2008, and will apply only to original transfers made after that date; early adoption is not permitted. The Company is currently evaluating the impact, if any, the adoption of FSPFAS 140-3will have on its financial position and results of operations.
 
Determination of the Useful Life of Intangible Assets — FSPFAS 142-3
 
In April 2008, the FASB issued an FSP “Determination of the Useful Life of Intangible Assets”(“FSP 142-3”),which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142.FSP 142-3is intended to improve the consistency between the useful life of an intangible asset determined under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R) and other U.S. Generally Accepted Accounting Principles. The guidance for determining the useful life of a recognized intangible asset in this FSP shall be applied prospectively to intangible assets acquired after the effective date. The disclosure requirements in this FSP shall be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date.FSP 142-3is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is not permitted. The Company is currently evaluating the impact, if any, the adoption of FSP,142-3 will have on its financial position and results of operations.
 
Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities — FSP EITF03-6-1
 
In June 2008, the FASB issued an FSP “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (“FSPEITF 03-6-1”),which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method as described in SFAS No. 128, “Earnings per Share.” Under the guidance in FSPEITF 03-6-1,unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. All prior-period earnings per share data presented shall be adjusted retrospectively. Early adoption is not permitted. The Company is currently assessing the impact, if any, the adoption of FSPEITF 03-6-1will have on its financial position and results of operations.
 
EITF IssueNo. 08-6,Equity Method Investment Accounting Considerations
 
In November 2008, the FASB issued EITF IssueNo. 08-6,“Equity Method Investment Accounting Considerations”(“EITF 08-6”).EITF 08-6clarifies the accounting for certain transactions and impairment considerations involving equity method investments.EITF 08-6applies to all investments accounted for under the equity method.EITF 08-6is effective for fiscal years and interim periods beginning on or after December 15, 2008. The Company is currently assessing the impact, if any, the adoption ofEITF 08-6will have on its financial position and results of operations.


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2.  Investments in and Advances to Joint Ventures
 
The Company’s significant unconsolidated joint ventures at December 31, 2008, are as follows:
 
       
  Effective
   
  Ownership
   
Unconsolidated Real Estate Ventures
 Percentage (1)  
Assets Owned
 
Sun Center Limited
  79.45% A shopping center in Columbus, Ohio
DDRA Community Centers Five LP
  50.0  Five shopping centers in several states
DOTRS LLC
  50.0  A shopping center in Macedonia, Ohio
Jefferson County Plaza LLC
  50.0  A shopping center in St. Louis (Arnold), Missouri
Lennox Town Center Limited
  50.0  A shopping center in Columbus, Ohio
Sansone Group/DDRC LLC
  50.0  A management and development company
Sonae Sierra Brazil BV Sarl
  47.4  Nine shopping centers, one shopping center under development and a management company in Brazil
Retail Value Investment Program IIIB LP
  25.75  A shopping center in Deer Park, Illinois
Retail Value Investment Program VIII LP
  25.75  A shopping center in Austin, Texas
RO & SW Realty LLC
  25.25  11 shopping centers in several states
Cole MT Independence Missouri JV LLC
  25.0  A shopping center in Independence, Missouri
DDR Macquarie Fund
  25.0  50 shopping centers in several states
Retail Value Investment Program VII LLC
  21.0  Two shopping centers in California
Coventry II DDR Buena Park LLC
  20.0  A shopping center in Buena Park, California
Coventry II DDR Fairplain LLC
  20.0  A shopping center in Benton Harbor, Michigan
Coventry II DDR Merriam Village LLC
  20.0  A shopping center in Merriam, Kansas
Coventry II DDR Phoenix Spectrum LLC
  20.0  A shopping center in Phoenix, Arizona
Coventry II DDR Totem Lakes LLC
  20.0  A shopping center in Kirkland, Washington
Coventry II DDR Ward Parkway LLC
  20.0  A shopping center in Kansas City, Missouri
DDR Domestic Retail Fund I
  20.0  63 shopping centers in several states
DDR Markaz II LLC
  20.0  13 neighborhood grocery-anchored retail properties in several states
DDR — SAU Retail Fund LLC
  20.0  29 shopping centers located in several states
Service Holdings LLC
  20.0  44 retail sites in several states
Coventry II DDR Westover LLC
  20.0  A shopping center in San Antonio, Texas
Coventry II DDR Tri-County LLC
  20.0  A shopping center in Cincinnati, Ohio
DDRTC Core Retail Fund LLC
  15.0  66 assets in several states
Macquarie DDR Trust
  12.3  An Australian Real Estate Investment Trust
Coventry II DDR Bloomfield LLC
  10.0  A shopping center under development in Bloomfield Hills, Michigan
Coventry II DDR Marley Creek Square LLC
  10.0  A shopping center in Orland Park, Illinois
Coventry II DDR Montgomery Farm LLC
  10.0  A shopping center in Allen, Texas
DPG Realty Holdings LLC
  10.0  12 neighborhood grocery-anchored retail properties in several states
TRT DDR Venture I
  10.0  Three shopping centers in several states
DDR MDT PS LLC
  0.0  Six shopping centers in several states
 
 
(1)Ownership may be held through different investment structures. Percentage ownerships are subject to change as certain investments contain promoted structures.


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Combined condensed unconsolidated financial information of the Company’s unconsolidated joint venture investments is summarized as follows (in thousands):
 
         
  December 31, 
  2008  2007 
 
Combined balance sheets
        
Land
 $2,378,033  $2,384,069 
Buildings
  6,353,985   6,253,167 
Fixtures and tenant improvements
  131,622   101,115 
         
   8,863,640   8,738,351 
Less: Accumulated depreciation
  (606,530)  (412,806)
         
   8,257,110   8,325,545 
Construction in progress
  412,357   207,387 
         
Real estate, net
  8,669,467   8,532,932 
Receivables, net
  136,410   124,540 
Leasehold interests
  12,615   13,927 
Other assets
  315,591   365,925 
         
  $9,134,083  $9,037,324 
         
Mortgage debt
 $5,776,897  $5,551,839 
Amounts payable to DDR
  64,967   8,492 
Other liabilities
  237,363   201,083 
         
   6,079,227   5,761,414 
Accumulated equity
  3,054,856   3,275,910 
         
  $9,134,083  $9,037,324 
         
Company’s share of accumulated equity(1)
 $622,569  $614,477 
         
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Combined statements of operations
            
Revenues from operations
 $946,340  $812,630  $429,190 
             
Rental operation expenses
  328,875   272,277   145,893 
Impairment charges
  3,887   —   — 
Depreciation and amortization expense
  241,652   193,032   81,262 
Interest expense
  307,580   269,405   129,000 
             
   881,994   734,714   356,155 
             
Income before gain on disposition of real estate and discontinued operations
  64,346   77,916   73,035 
Income tax expense (primarily Sonae Sierra Brazil), net
  (15,479)  (4,839)  (1,176)
(Loss) gain on disposition of real estate
  (67)  94,386   398 
Other
  (31,318)  —   — 
             
Income from continuing operations
  17,482   167,463   72,257 
             
Discontinued operations:
            
Income (loss) from discontinued operations, net of tax
  105   (784)  24 
Gain on disposition of real estate, net of tax
  7,364   2,516   20,343 
             
   7,469   1,732   20,367 
             
Net income
 $24,951  $169,195  $92,624 
             
Company’s share of net income(2)
 $17,335  $44,537  $28,530 
             


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Investments in and advances to joint ventures include the following items, which represent the difference between the Company’s investment and its proportionate share of all of the unconsolidated joint ventures’ underlying net assets (in millions):
 
         
  For the Year Ended
 
  December 31, 
  2008  2007 
 
Company’s proportionate share of accumulated equity
 $622.6  $614.5 
Basis differentials(2)
  (4.6)  114.1 
Deferred development fees, net of portion relating to the Company’s interest
  (5.2)  (3.8)
Basis differential upon transfer of assets(2)
  (95.4)  (97.2)
Notes receivable from investments
  1.4   2.0 
Amounts payable to DDR
  65.0   8.5 
         
Investments in and advances to joint ventures(1)
 $583.8  $638.1 
         
 
 
(1)The difference between the Company’s share of accumulated equity and the investments in, and advances to, joint ventures recorded on the Company’s consolidated balance sheets primarily results from the basis differentials, as described below, deferred development fees, net of the portion relating to the Company’s interest notes and amounts receivable from the unconsolidated joint ventures’ investments.
 
(2)Basis differentials occur primarily when the Company has purchased interests in existing unconsolidated joint ventures at fair market values, which differ from their proportionate share of the historical net assets of the unconsolidated joint ventures. In addition, certain acquisition, transaction and other costs, including capitalized interest, and impairments of the Company’s investments that were other than temporary may not be reflected in the net assets at the joint venture level. Basis differentials recorded upon transfer of assets are primarily associated with assets previously owned by the Company that have been transferred into an unconsolidated joint venture at fair value. This amount represents the aggregate difference between the Company’s historical cost basis and the basis reflected at the joint venture level. Certain basis differentials indicated above are amortized over the life of the related asset.
 
Differences in income also occur when the Company acquires assets from unconsolidated joint ventures. The difference between the Company’s share of net income, as reported above, and the amounts included in the consolidated statements of operations is attributable to the amortization of such basis differentials, deferred gains and differences in gain (loss) on sale of certain assets due to the basis differentials. The Company’s share of joint venture net income has been increased by $0.4 million, reduced by $1.2 million and increased by $1.6 million for the years ended December 31, 2008, 2007 and 2006, respectively, to reflect additional basis depreciation and basis differences in assets sold.
 
The Company has made advances to several joint ventures in the form of notes receivable and fixed-rate loans that accrue interest at rates ranging from 10.5% to 12.0%. Maturity dates range from payment on demand to July 2011. Included in the Company’s accounts receivables are approximately $8.2 million and $5.0 million at December 31, 2008 and 2007, respectively, due from affiliates related to construction receivables.
 
Service fees earned by the Company through management, leasing, development and financing activities related to all of the Company’s unconsolidated joint ventures are as follows (in millions):
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Management and other fees
 $50.3  $40.4  $23.7 
Acquisition, financing, guarantee and
  1.6   8.5   0.5 
other fees(1) 
            
Development fees and leasing commissions
  12.0   9.6   6.1 
Interest income
  0.8   0.5   5.4 
 
 
(1)Acquisition fees of $6.3 million were earned from the formation of the DDRTC Core Retail Fund LLC in 2007, excluding the Company’s retained ownership. Financing fees were earned from several unconsolidated joint venture interests, excluding the Company’s retained ownership. The Company’s fees were earned in conjunction with services rendered by


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the Company in connection with the acquisition of the IRRETI real estate assets and financings and re-financings of unconsolidated joint ventures.
 
The Company’s joint venture agreements generally include provisions whereby each partner has the right to trigger a purchase or sale of its interest in the joint venture (Reciprocal Purchase Rights), to initiate a purchase or sale of the properties (Property Purchase Rights) after a certain number of years, or if either party is in default of the joint venture agreements. Under these provisions, the Company is not obligated to purchase the interests of its outside joint venture partners.
 
Unconsolidated Joint Venture Interests
 
DDR Macquarie Fund and Macquarie DDR Trust
 
The Company entered into a joint venture with Macquarie DDR Trust (ASX:MDT) (“MDT”), an Australian Real Estate Investment Trust which is managed by an affiliate of Macquarie Group Limited (ASX: MQG), an international investment bank, advisor and manager of specialized real estate funds, focusing on acquiring ownership interests in institutional-quality community center properties in the United States (“DDR Macquarie Fund”). DDR Macquarie Fund is in the business of expanding, owning and operating shopping centers. DDR provides management, financing, expansion, re-tenanting and oversight services on these real estate investments.
 
In February 2008, the Company began purchasing units of MDT. Through December 31, 2008, the Company purchased an aggregate of 115.7 million units of MDT at an aggregate purchase price of $43.4 million. Through the combination of its purchase of the units in MDT (8.3% on a weighted-average basis for the year ended December 31, 2008, and 12.3% as of December 31, 2008) and its 14.5% direct and indirect ownership of the DDR Macquarie Fund, DDR is entitled to an approximate 25.0% effective economic interest in the DDR Macquarie Fund as of December 31, 2008. As the Company’s direct and indirect investments in MDT and the DDR Macquarie Fund give it the ability to exercise significant influence over operating and financial policies, the Company accounts for both its interest in MDT and the DDR Macquarie Fund using the equity method of accounting.
 
At December 31, 2008, the market price of the MDT shares as traded on the Australian Securities Exchange was $0.04 per share, as compared to $0.25 per share at September 30, 2008. This represents a decline of over 80% in value in the fourth quarter of 2008. Due to the significant decline in the unit value of this investment, as well as the continued deterioration of the global capital markets and the related impact on the real estate market and retail industry, the Company determined that the loss in value was other than temporary pursuant to the provisions of APB 18. Accordingly, the Company recorded an impairment charge of approximately $31.7 million related to this investment (Note 14) reducing its investment in MDT to $4.8 million at December 31, 2008. MDT was considered a significant subsidiary pursuant to applicableRegulation S-Xrules at December 31, 2008 due to the significance of the impairment charge recorded.
 
DDR Macquarie Fund is a VIE. However, the Company was not determined to be the primary beneficiary, as MDT is the entity that absorbs the majority of the VIE’s “expected losses” pursuant to the provisions of FIN 46(R). The following is summary financial information, available as of December 31, 2008 and 2007, regarding DDR Macquarie Fund and the Company’s investment (in millions):
 
         
  December 31, 
  2008  2007 
 
Real estate assets
 $1,759.2  $1,802.2 
Non-recourse debt
  1,150.7   1,177.5 
DDR direct ownership interest
  14.5%  14.5%
DDR maximum exposure to loss:
        
Investment in DDR Macquarie Fund
  26.5   36.3 
Annual asset management and performance fees
  10.4   9.2 
 
The financial statements of DDR Macquarie Fund are included as part of the combined unconsolidated joint ventures financial statements disclosed above. The Company has not provided any additional financial or other support to DDR Macquarie Fund or MDT during 2008 and does not have any contractual commitments or


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disproportionate obligations to provide additional financial support. The Company has assessed its risk of a loss equal to the maximum exposure to be remote and accordingly has not recognized an obligation associated with any portion of the maximum exposure to loss.
 
DDR Domestic Retail Fund I
 
In June 2007, the Company formed DDR Domestic Retail Fund I (the “Domestic Retail Fund”), a Company sponsored, fully-seeded commingled fund. The Domestic Retail Fund acquired 63 shopping center assets aggregating 8.3 million square feet of Company-owned GLA (“Portfolio”) from the Company and a joint venture for approximately $1.5 billion. The Portfolio is composed of 54 assets acquired by the Company through its acquisition of IRRETI (Note 3), seven assets formerly held in a joint venture with Kuwait Financial Centre (“DDR Markaz LLC”), in which the Company had a 20% ownership interest, and two assets from the Company’s wholly-owned portfolio. The Company recognized a gain of approximately $9.6 million, net of its 20% retained interest, from the sale of the two wholly-owned assets, which is included in gain on disposition of real estate in the Company’s consolidated statements of operations. In conjunction with the sale of assets to the Domestic Retail Fund and identification of the equity partners, the Company paid a $7.8 million fee to a third-party consulting firm and recognized this amount as a reduction of gain on disposition of real estate. DDR Markaz LLC recorded a gain of approximately $89.9 million. The Company’s proportionate share of approximately $18.0 million of the joint venture gain was deferred, as the Company retained an effective 20% ownership interest in these assets. As the Company does not have economic or effective control, the Domestic Retail Fund is accounted for using the equity method of accounting. The Company has been engaged by the Domestic Retail Fund to perform day-to-day operations of the properties and receives fees for asset management and property management, leasing, construction management and ancillary income in addition to a promoted interest. In addition, upon the sale of the assets from DDR Markaz LLC to the Domestic Retail Fund, the Company recognized promoted income of approximately $13.6 million, which is included in the equity in net income of joint ventures for the year ended December 31, 2007.
 
DDRTC Core Retail Fund LLC
 
In February 2007, the Company formed a joint venture (“DDRTC Core Retail Fund LLC”) with TIAA-CREF , which acquired 66 shopping center assets from IRRETI comprising approximately 15.6 million square feet of Company-owned GLA. DDRTC Core Retail Fund LLC is owned 85% by TIAA-CREF and 15% by the Company. As the Company does not have economic or effective control, DDRTC Core Retail Fund LLC is accounted for using the equity method of accounting. Real estate and related assets of approximately $3.0 billion were acquired by DDRTC Core Retail Fund LLC. The DDRTC Core Retail Fund had debt of approximately $1.8 billion at formation, of which $285.6 million was assumed in connection with the acquisition of the properties. Pursuant to the terms of the joint venture agreement, the Company earned an acquisition fee of $6.3 million during the year ended December 31, 2007, and receives ongoing asset management, property management and construction management fees, plus fees on leasing and ancillary income. At December 31, 2008, this joint venture was considered a significant subsidiary pursuant to applicableRegulation S-Xrules due to the significance of the impairment charge recorded as discussed below.
 
Coventry II Fund
 
The Company and Coventry Real Estate Advisors (“CREA”) formed Coventry Real Estate Fund II (the “Coventry II Fund”). The Coventry II Fund was formed with several institutional investors and CREA as the investment manager. Neither the Company nor any of its officers owns a common equity interest in this Coventry II Fund or has any incentive compensation tied to this Coventry II Fund. The Coventry II Fund’s strategy was to invest in a variety of retail properties that present opportunities for value creation, such as re-tenanting, market repositioning, redevelopment or expansion.
 
The Coventry II Fund and the Company, through a joint venture, acquired 11 value-added retail properties and owns 44 sites formerly occupied by Service Merchandise in the United States. The Company co-invested approximately 20% in each joint venture and is generally responsible for day-to-day management of the properties. Pursuant to the terms of the joint venture, the Company earns fees for property management, leasing and


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construction management. The Company also could earn a promoted interest, along with CREA, above a preferred return after return of capital to fund investors.
 
As of December 31, 2008, the aggregate amount of the Company’s net investment in the Coventry II joint ventures is approximately $72.0 million. The Company has also advanced $58.1 million of financing to one of the Coventry II joint ventures which accrues interest at the greater of LIBOR plus 700 basis points or 12% and has an initial maturity of July 2011. In addition to its existing equity and note receivable, the Company has provided payment guaranties to third-party lenders in connection with financing for seven of the projects. The amount of each such guaranty is not greater than the proportion to the Company’s investment percentage in the underlying project, and the aggregate amount of the Company’s guaranties is approximately $35.3 million.
 
Discontinued Operations
 
Included in discontinued operations in the combined statements of operations for the joint ventures are the following properties sold subsequent to December 31, 2005:
 
  • A 10% interest in a shopping center in Kildeer, Illinois, sold in 2006;
 
  • A 20% interest in Service Merchandise sites, six sites sold in 2007 and one site sold in 2006;
 
  • A 20.75% interest in one property in Everett, Washington, sold in 2006;
 
  • A 25.5% interest in five properties in Kansas City, Kansas and Kansas City, Missouri, one sold in 2007 and four sold in 2006;
 
  • An approximate 25% interest in one Service Merchandise site sold in 2006 and
 
  • A 50% interest in a property in Fort Worth, Texas, sold in 2006.
 
In addition, a 50% owned joint venture sold its interest in vacant land in 2007. This disposition did not meet the discontinued operations disclosure requirement.
 
Impairment of Joint Venture Investments
 
In December 2008, due to the continued deterioration of the U.S. capital markets, the lack of liquidity and the related impact on the real estate market and retail industry which accelerated during the fourth quarter of 2008, the Company determined that several of its unconsolidated joint venture investments incurred an “other than temporary impairment” at December 31, 2008. The approximately $107.0 million of impairment charges associated with the joint venture investments described below were determined in accordance with APB 18. The provisions of this opinion require that a loss in value of an investment under the equity method of accounting that is an other than “temporary” decline must be recognized. The estimated fair value of each investment was determined pursuant to the provisions of SFAS 157 (Note 14) because investments in unconsolidated joint ventures are considered financial assets subject to the provisions of this standard. A summary of the impairment charge by investment is as follows (in millions):
 
     
DDRTC Core Retail Fund LLC
 $47.3 
Macquarie DDR Trust
  31.7 
DDR-SAURetail Fund LLC
  9.0 
Coventry II DDR Bloomfield LLC
  10.8 
Coventry II DDR Merriam Village LLC
  3.3 
RO & SW Realty LLC/Central Park Solon LLC (Note 17)
  3.2 
DPG Realty Holdings LLC
  1.7 
     
  $107.0 
     


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3.  Acquisitions and Pro Forma Financial Information
 
Acquisitions
 
On February 22, 2007, the shareholders of Inland Retail Real Estate Trust, Inc. (“IRRETI”) approved a merger with a subsidiary of the Company pursuant to a merger agreement among IRRETI, the Company and the subsidiary. Pursuant to the merger, the Company acquired all of the outstanding shares of IRRETI for a total merger consideration of $14.00 per share, of which $12.50 per share was funded in cash and $1.50 per share was paid in the form of DDR common shares. As a result, on February 27, 2007, the Company issued 5.7 million DDR common shares to the IRRETI shareholders with an aggregate value of approximately $394.2 million valued at $69.54 per share, which was the average closing price of the Company’s common shares for the 10 trading days immediately preceding the two trading days prior to the IRRETI shareholders’ meeting. The other assets allocation of $34.2 million relates primarily to in-place leases, leasing commissions, tenant relationships and tenant improvements of the properties (Note 6). There was a separate allocation in the purchase price of $7.5 million for above-market leases and $8.4 million for below-market leases. The merger was accounted for utilizing the purchase method of accounting. The Company entered into the merger to acquire a large portfolio of assets, among other reasons.
 
The IRRETI merger was initially recorded at a total cost of approximately $6.2 billion. Real estate and related assets of approximately $3.1 billion were recorded by the Company and approximately $3.0 billion was recorded by the DDRTC Core Retail Fund LLC joint venture. The Company assumed debt at a fair market value of approximately $443.0 million. At the time of the merger, the IRRETI real estate portfolio consisted of 315 community shopping centers, neighborhood shopping centers and single tenant/net leased retail properties, totaling approximately 35.2 million square feet of Company-owned GLA, and five development properties. In connection with the merger, the DDRTC Core Retail Fund LLC joint venture acquired 66 of these shopping centers, totaling approximately 15.6 million square feet of Company-owned GLA. During 2007, the Company sold or transferred 78 of the assets, valued at approximately $1.2 billion, acquired in the merger with IRRETI, 21 of which were sold to independent buyers with the remaining 57 contributed to unconsolidated joint ventures.
 
At December 31, 2007, the total aggregate purchase price, based on the remaining 171 IRRETI properties that were wholly owned by the Company as of that date, was allocated as follows (in thousands):
 
     
Land
 $478,197 
Building
  1,078,815 
Tenant improvements
  9,949 
Intangible assets
  41,673 
     
  $1,608,634 
     
 
In 2006, the MV LLC joint venture purchased the underlying real estate of one operating Mervyns site for approximately $11.0 million, and the Company purchased one additional site for approximately $12.4 million. The assets were acquired from several funds, one of which was managed by Lubert-Adler Real Estate Funds (Note 17). The Company is responsible for the day-to-day management of the assets and receives fees in accordance with the same fee schedule as DDR Macquarie Fund for property management services.
 
Pro Forma Financial Information
 
The following unaudited supplemental pro forma operating data is presented for the years ended December 31, 2007 and 2006, as if the IRRETI merger and the formation of the DDRTC Core Retail Fund LLC joint venture had occurred at the beginning of each period presented. Pro forma amounts include general and administrative expenses that IRRETI reported in its historical results of approximately $48.3 million for the year ended 2007, including severance, a substantial portion of which management believes to be non-recurring.
 
These acquisitions were accounted for using the purchase method of accounting. The revenues and expenses related to assets and interests acquired are included in the Company’s historical results of operations from the date of purchase.


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The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the acquisitions occurred as indicated; nor does it purport to represent the results of the operations for future periods (in thousands, except per share data):
 
         
  For the Year Ended December 31,
 
  (Unaudited) 
  2007  2006 
 
Pro forma revenues
 $926,030  $928,841 
         
Pro forma income from continuing operations
 $145,557  $203,928 
         
Pro forma income from discontinued operations
 $21,302  $20,457 
         
Pro forma net income applicable to common shareholders
 $184,909  $244,460 
         
Per share data:
        
Basic earnings per share data:
        
Income from continuing operations applicable to common shareholders
 $1.33  $1.77 
Income from discontinued operations
  0.17   0.17 
         
Net income applicable to common shareholders
 $1.50  $1.94 
         
Diluted earning per share data:
        
Income from continuing operations applicable to common shareholders
 $1.32  $1.77 
Income from discontinued operations
  0.16   0.16 
         
Net income applicable to common shareholders
 $1.48  $1.93 
         
 
The above supplemental pro forma financial information does not present the acquisitions described below or the disposition of real estate assets. In addition, the above supplemental pro forma operating data does not present the sale of assets for the years ended December 31, 2007 and 2006, or the formation of a joint venture which owns three assets.
 
During the year ended December 31, 2006, the Company acquired its partners’ interests, at an initial aggregate investment of approximately $94.1 million, net of mortgages assumed, in the following joint venture properties:
 
     
    Company-
    Owned
  Interest
 Square Feet
  Acquired (Thousands)
 
Phoenix, Arizona
 50% 197
Pasadena, California
 75% 557
Salisbury, Maryland
 50% 126
Apex, North Carolina
 80%/20% 324
San Antonio, Texas
 50% Under Development
     
    1,204
     
 
Additionally, the Company acquired one Mervyns site for approximately $12.4 million, which was accounted for as a financing lease. (Note 17).
 
4.  Notes Receivable
 
The Company has notes receivables aggregating $75.8 million and $18.6 million, including accrued interest, at December 31, 2008 and 2007, respectively. The notes are secured by certain rights in development projects, partnership interests, sponsor guarantees and real estate assets. Included in Notes Receivable are other financing receivables that consist of loans acquired. For a complete listing of the Company’s financing receivables at December 31, 2008, see Financial Statement Schedule IV of this annual report onForm 10-K.


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Notes receivable consists of the following (in millions):
 
             
  
December
  Maturity
 Interest
  
2008
  
2007
  
Date
 
Rate
 
Tax Increment Financing Bonds(1):
            
Town of Plainville, Connecticut
 $6.8  $7.0  April 2021 7.13%
City of Merriam, Kansas
  4.8   6.0  February 2016 6.9%
City of St. Louis, Missouri
  2.8   2.5  July 2026 7.1% - 8.5%
Chemung County Industrial Development Agency
  2.0   1.9  April 2014 and April 2018 5.5%
             
   16.4   17.4     
Other notes
  2.1   1.2     
Financing receivables
  57.3   —  December 2010 to September 2017 6.0% -12.0%
             
  $75.8  $18.6     
             
 
 
(1)Interest and principal are payable solely from the incremental real estate taxes, if any, generated by the respective shopping center and development project pursuant to the terms of the financing agreement.
 
The following table reconciles the financing receivables on real estate from January 1, 2008, to December 31, 2008 (in thousands):
 
     
  2008 
 
Balance at January 1
 $— 
Additions:
    
New mortgage loans
  62,729 
     
Deductions:
    
Loan loss reserve(1)
  (5,400)
     
Balance at December 31
 $57,329 
     
 
 
(1)Amount classified in other expense, net in the consolidated statements of operations for the year ended December 31, 2008.
 
As of December 31, 2008, the Company had seven loans with total commitments of up to $77.7 million, of which $62.7 million had been funded. Availability under the Company’s revolving credit facilities is expected to be sufficient to fund these commitments. The Company identified a financing receivable with a carrying value of $10.8 million that was impaired at December 31, 2008 in accordance with SFAS 114 resulting in a specific reserve of approximately $5.4 million, which was driven by the deterioration of the economy and the dislocation of the credit markets. In addition to this receivable, the Company has one additional financing receivable in the amount of $19.0 million that is considered non-performing.
 
5.  Deferred Charges
 
Deferred charges consist of the following (in thousands):
 
         
  December 31, 
  2008  2007 
 
Deferred financing costs
 $56,827  $54,547 
Less: Accumulated amortization
  (30,214)  (23,375)
         
  $26,613  $31,172 
         
 
The Company incurred deferred financing costs aggregating $5.7 million and $17.6 million in 2008 and 2007, respectively. Deferred financing costs paid in 2008 primarily relate to mortgages payable (Note 9). Deferred financing costs paid in 2007 primarily relate to the issuance of convertible notes (Note 8), modification of the


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Company’s unsecured credit agreements, and expansion of term loans (Note 7). Amortization of deferred charges was $10.1 million, $10.1 million and $7.1 million for the years ended December 2008, 2007 and 2006, respectively.
 
6.  Other Assets
 
Other assets consist of the following (in thousands):
 
         
  December 31, 
  2008  2007 
 
Intangible assets:
        
In-place leases (including lease origination costs and fair market value of leases), net
 $21,721  $31,201 
Tenant relations, net
  15,299   22,102 
         
Total intangible assets
  37,020   53,303 
Other assets:
        
Prepaids, deposits and other assets
  91,770   80,191 
         
Total other assets
 $128,790  $133,494 
         
 
The amortization period of the in-place leases and tenant relations is approximately two to 31 years and 10 years, respectively. The Company recorded amortization expense of approximately $8.8 million, $8.2 million and $5.5 million for the years ended December 31, 2008, 2007 and 2006, respectively. The estimated amortization expense associated with the Company’s intangible assets is $7.6 million, $7.5 million, $6.6 million, $6.5 million and $6.0 million for the years ending December 31, 2009, 2010, 2011, 2012 and 2013, respectively. Other assets consist primarily of deposits, land options and other prepaid expenses.
 
7.  Revolving Credit Facilities and Term Loans
 
The Company maintains an unsecured revolving credit facility with a syndicate of financial institutions, (the “Unsecured Credit Facility”), which was amended in December 2007. The Unsecured Credit Facility, for which JP Morgan serves as the administrative agent, provides for borrowings of $1.25 billion, if certain financial covenants are maintained, and an accordion feature for a future expansion to $1.4 billion upon the Company’s request, provided that new or existing lenders agree to the existing terms of the facility and increase their commitment level, and a maturity date of June 2010, with a one-year extension option at the option of the Company subject to certain customary closing conditions. The Unsecured Credit Facility includes a competitive bid option on periodic interest rates for up to 50% of the facility. The Company’s borrowings under the Unsecured Credit Facility bear interest at variable rates at the Company’s election, based on either (i) the prime rate less a specified spread (0.125% at December 31, 2008), as defined in the facility or (ii) LIBOR, plus a specified spread (0.60% at December 31, 2008). The specified spreads vary depending on the Company’s long-term senior unsecured debt rating from Standard and Poor’s and Moody’s Investors Service. The Company is required to comply with certain financial covenants relating to total outstanding indebtedness, secured indebtedness, maintenance of unencumbered real estate assets and fixed charge coverage, as well as various non-financial covenants including a material adverse change provision. The Unsecured Credit Facility is used to finance the acquisition, development and expansion of shopping center properties, to provide working capital and for general corporate purposes. The Company was in compliance with these covenants at December 31, 2008. The facility also provides for an annual facility fee of 0.15% on the entire facility. At December 31, 2008 and 2007, total borrowings under the Unsecured Credit Facility aggregated $975.4 million and $709.5 million, respectively, with a weighted average interest rate of 2.2% and 5.5%, respectively.
 
The Company also maintains a $75 million unsecured revolving credit facility, amended in December 2007, with National City Bank (together with the Unsecured Credit Facility, the “Revolving Credit Facilities”). This facility has a maturity date of June 2010, with a one-year extension option at the option of the Company subject to certain customary closing conditions, and reflects terms consistent with those contained in the Unsecured Credit Facility. Borrowings under this facility bear interest at variable rates based on (i) the prime rate less a specified spread (-0.125% at December 31, 2008), as defined in the facility or (ii) LIBOR, plus a specified spread (0.60% at


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December 31, 2008). The specified spreads are dependent on the Company’s long-term senior unsecured debt rating from Standard and Poor’s and Moody’s Investors Service. The Company is required to comply with certain covenants relating to total outstanding indebtedness, secured indebtedness, maintenance of unencumbered real estate assets and fixed charge coverage. The Company was in compliance with these covenants at December 31, 2008. At December 31, 2008, total borrowings under the National City Bank facility aggregated $51.8 million with a weighted average interest rate of 1.1%. At December 31, 2007, there were no borrowings outstanding.
 
Additionally, the Company maintains an $800 million collateralized term loan with a syndicate of financial institutions, for which KeyBank Capital Markets serves as the administrative agent (“Term Loan”). The Term Loan matures in February 2011, with a one-year extension option at the option of the Company subject to certain customary closing conditions. Borrowings under this facility bear interest at variable rates based on LIBOR plus a specified spread based on the Company’s current credit rating (0.70% at December 31, 2008). The collateral for this Term Loan is assets, or investment interests in certain assets, that are already collateralized by first mortgage loans. The Company is required to comply with similar covenants as agreed upon in the Company’s Revolving Credit Facilities. The Company was in compliance with these covenants at December 31, 2008. At December 31, 2008 and 2007, total borrowings under this facility aggregated $800.0 million with a weighted average interest rate of 4.0% and 5.8%, respectively.
 
In February 2007, the Company entered into a $750 million unsecured bridge facility (“Bridge Facility”) with Bank of America, N.A. in connection with the financing of the IRRETI merger. The Bridge Facility had a maturity date of August 2007 and bore interest at LIBOR plus 0.75%. This Bridge Facility was repaid in June 2007. Following the repayment, the Company did not have the right to draw on this Bridge Facility.
 
Total fees paid by the Company on its Revolving Credit Facilities and Term Loans in 2008, 2007 and 2006 aggregated approximately $2.1 million, $1.9 million and $1.7 million, respectively. At December 31, 2008 and 2007, the Company all of the was in compliance with its financial and other covenant requirements.
 
8.  Fixed-Rate Notes
 
The Company had outstanding unsecured fixed-rate notes in the aggregate of approximately $2.5 billion and $2.6 billion at December 31, 2008 and 2007, respectively. Several of the notes were issued at a discount aggregating $1.9 million and $2.8 million at December 31, 2008 and 2007, respectively. The effective interest rates of the unsecured notes range from 3.4% to 7.5% per annum.
 
In March 2007, the Company issued $600 million of 3.0% senior convertible notes due in 2012 (the “2007 Senior Convertible Notes”). In August 2006, the Company issued $250 million of senior convertible notes due in 2011 (the “2006 Senior Convertible Notes” and, together with the 2007 Senior Convertible Notes, the “Senior Convertible Notes”). The Senior Convertible Notes are senior unsecured obligations and rank equally with all other senior unsecured indebtedness.
 
The Senior Convertible Notes are subject to net settlement based on conversion prices (“Conversion Price”) which are subject to adjustment based on increases in the Company’s quarterly stock dividend. If certain conditions are met, the incremental value can be settled in cash or the Company’s common shares, at the Company’s option. The Senior Convertible Notes may only be converted prior to maturity based on certain provisions in the governing note documents. In connection with the issuance of these notes, the Company entered into a registration rights agreement for the common shares that may be issuable upon conversion of the Senior Convertible Notes.
 
Concurrent with the issuance of the Senior Convertible Notes, the Company purchased an option on its common shares in a private transaction in order to effectively increase the conversion price of the notes to a specified option price (“Option Price”). This purchase option allows the Company to receive a number of the Company’s common shares (“Maximum Common Shares”, from counterparties equal to the amounts of common sharesand/or cash related to the excess conversion value that it would pay to the holders of the Senior Convertible Notes upon conversion. The option was recorded as a reduction of shareholders’ equity.


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The following table summarizes the information related to the Senior Convertible Notes (shares and dollars in millions):
 
                 
        Maximum Common
    
  Conversion Price  Option Price  Shares  Option Cost 
 
2007 Senior Convertible Notes
 $74.56  $82.71   1.1  $32.6 
2006 Senior Convertible Notes
 $64.23  $65.17   0.5  $10.3 
 
The Company’s various fixed-rate notes have maturities ranging from January 2009 to July 2018. Interest coupon rates ranged from approximately 3.0% to 7.5% (averaging 4.4% and 4.5% at December 31, 2008 and 2007, respectively). Notes issued prior to December 31, 2001, aggregating $100 million, may not be redeemed by the Company prior to maturity and will not be subject to any sinking fund requirements. Notes issued subsequent to 2001, aggregating $1.2 billion at December 31, 2008, may be redeemed based upon a yield maintenance calculation. The notes issued in October 2005 (aggregating $345.7 million) are redeemable prior to maturity at par value plus a make-whole premium. If the notes issued in October 2005 are redeemed within 90 days of the maturity date, no make-whole premium is required. The convertible notes, aggregating $833.0 million at December 31, 2008, may be converted prior to maturity into cash equal to the lesser of the principal amount of the note or the conversion value and, to the extent the conversion value exceeds the principal amount of the note, common shares of the Company’s stock. The fixed-rate senior notes and Senior Convertible Notes were issued pursuant to an indenture dated May 1, 1994, as amended, which contains certain covenants including limitation on incurrence of debt, maintenance of unencumbered real estate assets and debt service coverage. Interest is paid semi-annually in arrears. At December 31, 2008 and 2007, the Company was in compliance with all of the financial and other covenant requirements.
 
9.  Mortgages Payable and Scheduled Principal Repayments
 
At December 31, 2008, mortgages payable, collateralized by investments and real estate with a net book value of approximately $2.9 billion and related tenant leases, are generally due in monthly installments of principaland/orinterest and mature at various dates through 2037. Fixed-rate debt obligations included in mortgages payable at December 31, 2008 and 2007, aggregated approximately $1,373.4 million and $1,310.8 million, respectively. Fixed interest rates ranged from approximately 4.2% to 10.2% (averaging 6.0% and 6.2% at December 31, 2008 and 2007, respectively). Variable-rate debt obligations totaled approximately $264.0 million and $148.5 million at December 31, 2008 and 2007, respectively. Interest rates on the variable-rate debt averaged 1.9% and 6.2% at December 31, 2008 and 2007.
 
Included in mortgages payable are $71.5 million and $72.8 million of tax-exempt certificates with a weighted average fixed interest rate of 1.9% and 4.1% at December 31, 2008 and 2007, respectively.
 
As of December 31, 2008, the scheduled principal payments of the Revolving Credit Facilities, Term Loans, fixed-rate senior notes and mortgages payable for the next five years and thereafter are as follows (in thousands):
 
     
Year
 Amount 
 
2009
 $399,685 
2010
  1,983,887 
2011
  1,609,142 
2012
  1,041,529 
2013
  432,348 
Thereafter
  450,773 
     
  $5,917,364 
     
 
Included in principal payments are $1.0 billion in 2010 and $800 million in 2011, associated with the maturing of the Revolving Credit Facilities and the Term Loans, respectively, both of which have a one year extension option, subject to certain requirements as described above.


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10.  Financial Instruments
 
The Company adopted the provisions of SFAS 157, as amended by FSPFAS No. 157-1,FSPFAS No. 157-2and FSPFAS No. 157-3,on January 1, 2008. The following methods and assumptions were used by the Company in estimating fair value disclosures of financial instruments:
 
Fair Value Hierarchy
 
SFAS 157 specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with SFAS 157, the following summarizes the fair value hierarchy:
 
  • Level 1 —Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;
 
  • Level 2 —Quoted prices for identical assets and liabilities in markets that are inactive, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly, such as interest rates and yield curves that are observable at commonly quoted intervals and
 
  • Level 3 —Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
 
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
 
Measurement of Fair Value
 
At December 31, 2008, the Company used pay-fixed interest rate swaps to manage its exposure to changes in benchmark interest rates. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative.
 
Although the Company has determined that the certain inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the Company’s counterparties and its own credit risk utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. During the second half of 2008, the credit spreads on the Company and certain of its counterparties widened significantly and as a result, as of December 31, 2008, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are significant to the overall valuation of all of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 3 of the fair value hierarchy. These inputs reflect the Company’s assumptions.
 
Items Measured at Fair Value on a Recurring Basis
 
The following table presents information about the Company’s financial assets and liabilities (in millions), which consists of interest rate swap agreements that are included in other liabilities at December 31, 2008, measured at fair value on a recurring basis as of December 31, 2008, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.
 
                 
  Fair Value Measurements
 
  at December 31, 2008 
  Level 1  Level 2  Level 3  Total 
 
Derivative Financial Instruments
 $—  $—  $21.7  $21.7 


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The table presented below presents a reconciliation of the beginning and ending balances of interest rate swap agreements that are included in other liabilities having fair value measurements based on significant unobservable inputs (Level 3). As described above, the Company transferred its derivatives into Level 3 from Level 2 during the fourth quarter of 2008 due to changes in the significance on our derivative’s valuation as a result of changes in nonperformance risk associated with our credit standing.
 
     
  Derivative Financial
 
  Instruments 
 
Balance of Level 3 at December 31, 2007
 $— 
Transfers into level 3
  (17.1)
Total losses included in other comprehensive (loss) income
  (4.6)
     
Balance at December 31, 2008
 $(21.7)
     
 
The fair value of derivative financial interests at December 31, 2007 was approximately $17.8 million. The losses of $4.6 million above included in other comprehensive loss are attributable to the change in unrealized gains or losses relating to derivative liabilities that are still held at December 31, 2008, none of which were reported in our consolidated statement of operations.
 
The Company calculates the fair value of its interest rate swaps pursuant to SFAS 157 based upon the amount of the expected future cash flows paid and received on each leg of the swap. The cash flows on the fixed leg of the swap are agreed to at inception and the cash flows on the floating leg of a swap change over time as interest rates change. To estimate the floating cash flows at each valuation date, the Company utilizes a forward curve which is constructed using LIBOR fixings, Eurodollar futures, and swap rates, which are observable in the market. Both the fixed and floating legs’ cash flows are discounted at market discount factors. For purposes of adjusting our derivative values, we incorporate the nonperformance risk for of both the Company and our counterparties to these contracts based upon either credit default swap spreads (if available) or Moody’s KMV ratings in order to derive a curve that considers the term structure of credit.
 
Cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accruals and other liabilities
 
The carrying amounts reported in the balance sheet for these financial instruments approximated fair value because of their short-term maturities. The carrying amount of straight-line rents receivable does not materially differ from its fair market value.
 
Notes receivable and advances to affiliates
 
The fair value is estimated by discounting the current rates at which management believes similar loans would be made. The fair value of these notes was approximately $134.0 million and $16.9 million at December 31, 2008 and 2007, respectively, as compared to the carrying amounts of $134.0 million and $16.9 million, respectively. The carrying value of the TIF Bonds (Note 4) approximated its fair value at December 31, 2008 and 2007. The fair value of loans to affiliates is not readily determinable and has been estimated by management based upon its assessment of the interest rate, credit risk and performance risk.
 
Debt
 
The fair market value of debt is determined using the trading price of public debt, or a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality, and risk profile including the Company’s non-performance risk.
 
Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments.


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Financial instruments at December 31, 2008 and 2007, with carrying values that are different than estimated fair values, based on the valuation method of SFAS 157 at December 31, 2008 and the valuation method of SFAS 107 at December 31, 2007 are summarized as follows (in thousands):
 
                 
  2008  2007 
  Carrying
  Fair
  Carrying
  Fair
 
  Amount  Value  Amount  Value 
 
Senior notes
 $2,452,741  $1,442,264  $2,622,219  $2,450,361 
Revolving Credit Facilities and Term Debt
  1,827,183   1,752,260   1,509,459   1,509,459 
Mortgages payable and other indebtedness
  1,637,440   1,570,877   1,459,336   1,501,345 
                 
  $5,917,364  $4,765,401  $5,591,014  $5,461,165 
                 
 
Accounting Policy for Derivative and Hedging Activities
 
All derivatives are recognized on the balance sheet at their fair value. On the date that the Company enters into a derivative, it designates the derivative as a hedge against the variability of cash flows that are to be paid in connection with a recognized liability or forecasted transaction. Subsequent changes in the fair value of a derivative designated as a cash flow hedge that is determined to be highly effective are recorded in other comprehensive income (loss), until earnings are affected by the variability of cash flows of the hedged transaction. Any hedge ineffectiveness is reported in current earnings.
 
From time to time, the Company enters into interest rate swaps to convert certain fixed-rate debt obligations to a floating rate (a “fair value hedge”). This is consistent with the Company’s overall interest rate risk management strategy to maintain an appropriate balance of fixed-rate and variable-rate borrowings. Changes in the fair value of derivatives that are highly effective and that are designated and qualify as a fair value hedge, along with changes in the fair value of the hedged liability that are attributable to the hedged risk, are recorded in current-period earnings. If hedge accounting is discontinued due to the Company’s determination that the relationship no longer qualified as an effective fair value hedge, the Company will continue to carry the derivative on the balance sheet at its fair value but cease to adjust the hedged liability for changes in fair value.
 
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Company formally assesses (both at the hedge’s inception and on an ongoing basis) whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the cash flows of the hedged items and whether those derivatives can be expected to remain highly effective in future periods. Should it be determined that a derivative is not (or has ceased to be) highly effective as a hedge, the Company will discontinue hedge accounting on a prospective basis.
 
The Company entered into consolidated joint ventures that own real estate assets in Canada and Russia. The net assets of these subsidiaries are exposed to volatility in currency exchange rates. As such, the Company uses nonderivative financial instruments to hedge this exposure. The Company manages currency exposure related to the net assets of the Company’s Canadian and European subsidiaries primarily through foreign currency-denominated debt agreements that the Company enters into. Gains and losses in the parent company’s net investments in its subsidiaries are economically offset by losses and gains in the parent company’s foreign currency-denominated debt obligations.
 
For the year ended December 31, 2008, $25.5 million of net losses related to the foreign currency-denominated debt agreements was included in the Company’s cumulative translation adjustment. As the notional amount of the nonderivative instrument substantially matches the portion of the net investment designated as being hedged and the nonderivative instrument is denominated in the functional currency of the hedged net investment, the hedge ineffectiveness recognized in earnings was not material.


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Risk Management
 
The Company enters into derivative contracts to minimize significant unplanned fluctuations in earnings that are caused by interest rate volatility or, in the case of a fair value hedge, to minimize the impacts of changes in the fair value of the debt. The Company does not typically utilize these arrangements for trading or speculative purposes. The principal risk to the Company through its interest rate hedging strategy is the potential inability of the financial institutions from which the interest rate swaps were purchased to cover all of their obligations. To mitigate this exposure, the Company purchases its interest rate swaps from major financial institutions.
 
Cash Flow Hedges
 
The Company has six interest rate swaps with notional amounts aggregating $600 million ($200 million which expires in 2009, $300 million which expires in 2010 and $100 million which expires in 2012). Interest rate swaps aggregating $500 million effectively convert Term Loan floating rate debt into a fixed rate of approximately 5.7%. Interest rate swaps aggregating $100 million effectively convert Revolving Credit Facilities floating rate debt into a fixed rate of approximately 5.5%. As of December 31, 2008 and 2007, the aggregate fair value of the Company’s $600 million of interest rate swaps was a liability of $21.7 million and $17.8 million, respectively, which is included in other liabilities in the consolidated balance sheets. For the year ended December 31, 2008, the amount of hedge ineffectiveness was not material.
 
All components of the interest rate swaps were included in the assessment of hedge effectiveness. The Company expects that within the next 12 months it will reflect as a decrease to earnings of $22.3 million for the amount recorded in accumulated other comprehensive loss.
 
Unconsolidated Joint Venture Derivative Instruments
 
At December 31, 2007, certain of the Company’s unconsolidated joint ventures had interest rate swaps with notional amounts aggregating $557.3 million converting LIBOR to a weighted average fixed rate of approximately 5.3%. The aggregate fair value of these instruments at December 31, 2007, was a liability of $20.5 million.
 
Investments in unconsolidated joint ventures are considered financial assets subject to the provisions of SFAS 157. See discussion of fair value considerations in Note 14.
 
11.  Commitments and Contingencies
 
Business Risks and Uncertainties
 
The retail and real estate markets have been significantly impacted by the continued deterioration of the global credit markets and other macro economic factors including, among others, rising unemployment and a decline in consumer confidence leading to a decline in consumer spending. Although a majority of the Company’s tenants remain in relatively strong financial standing, especially the anchor tenants, the current recession has resulted in tenant bankruptcies affecting the Company’s real estate portfolio including Mervyns, Linens ’n Things, Steve & Barry’s, Goody’s and Circuit City. In addition, certain other tenants may be experiencing financial difficulties. Due to the timing of these bankruptcies in the second half of 2008, they did not have a significant impact on the cash flows during 2008 as compared to our internal projections. However, given the expected decrease in occupancy and the projected timing associated with re-leasing these vacated spaces, the 2009 forecasts have been revised to reflect these events and the potential for further deterioration and the incorporation of expectations associated with the timing it will take to release the vacant space. This has resulted in downward pressure on the Company’s 2009 projected operating results. The reduced occupancy will likely have a negative impact on the Company’s consolidated cash flows, results of operations, financial position and financial ratios that are integral to the continued compliance with the covenants on the Company’s line of credit facilities as further described below. Offsetting some of the current challenges within the retail environment, the Company has a low occupancy cost relative to other retail formats and historical averages, as well as a diversified tenant base with only one tenant exceeding 2.5% of total consolidated revenues, Wal-Mart at 4.5%. Other significant tenants include Target, Lowe’s Home Improvement, Home Depot, Kohl’s, T.J. Maxx/Marshalls, Publix Supermarkets, PetSmart and Bed Bath & Beyond, all of which have relatively strong credit ratings. Management believes these tenants should continue providing the Company with a stable ongoing revenue base for


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the foreseeable future given the long-term nature of these leases. Moreover, the majority of the tenants in the Company’s shopping centers provide day-to-day consumer necessities versus high priced discretionary luxury items with a focus toward value and convenience, which should enable many tenants to continue operating within this challenging economic environment. Furthermore, LIBOR rates, the rates upon which the Company’s variable-rate debt is based, are at historic lows and are expected to have a positive impact on the cash flows.
 
As discussed in Notes 7 and 8, the Company’s credit facilities and the indentures under which the Company’s senior and subordinated unsecured indebtedness is, or may be, issued contain certain financial and operating covenants, including, among other things, leverage ratios, debt service coverage and fixed charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets and engage in mergers and certain acquisitions. These credit facilities and indentures also contain customary default provisions including the failure to timely pay principal and interest issued thereunder, the failure to comply with our financial and operating covenants, the occurrence of a material adverse effect on the Company, and the failure to pay when due any other Company consolidated indebtedness (including non-recourse obligations) in excess of $50 million. In the event our lenders declare a default, as defined in the applicable loan documentation, this could result in our inability to obtain further fundingand/or an acceleration of any outstanding borrowings.
 
As of December 31, 2008, the Company was in compliance with all of its financial covenants. However, due to the economic environment, the Company has less financial flexibility than desired given the current market dislocation. The Company’s current business plans indicate that it will be able to operate in compliance with these covenants in 2009 and beyond, however the current dislocation in the global credit markets has significantly impacted the projected cash flows, financial position and effective leverage of the Company. If there is a continued decline in the retail and real estate industriesand/or we are unable to successfully execute our plans as further described below, we could violate these covenants, and as a result may be subject to higher finance costs and feesand/oraccelerated maturities. In addition, certain of the Company’s credit facilities and indentures permit the acceleration of the maturity of debt issued thereunder in the event certain other debt of the Company has been accelerated. Furthermore, a default under a loan to the Company or its affiliates, a foreclosure on a mortgaged property owned by the Company or its affiliates or the inability to refinance existing indebtedness would have a negative impact on the Company’s financial condition, cash flows and results of operations. These facts and an inability to predict future economic conditions have encouraged the Company to adopt a strict focus on lowering leverage and increasing our financial flexibility.
 
The Company is committed to prudently managing and minimizing discretionary operating and capital expenditures and raising the necessary equity and debt capital to maximize our liquidity, repay our outstanding borrowings as they mature and comply with our financial covenants in 2009 and beyond. As discussed below, we plan to raise additional equity and debt through a combination of retained capital, the issuance of common shares, debt financing and refinancing and asset sales. In addition, the Company will strategically utilize proceeds from the above sources to repay outstanding borrowings on our credit facilities and strategically repurchase our publicly traded debt at a discount to par to further improve our leverage ratios.
 
  • Retained Equity — With regard to retained capital, the Company has adjusted its dividend policy to the minimum required to maintain its REIT status. The Company did not pay a dividend in January 2009 as it had already distributed sufficient funds to comply with its 2008 tax requirements. Moreover, the Company expects to fund a portion of its 2009 dividend payout through common shares and has the flexibility to distribute up to 90% of dividends in shares. This new policy is consistent with the Company’s top priorities to improve liquidity and lower leverage. This change in dividend payment is expected to save in excess of $300 million of retained capital in 2009.
 
  • Issuance of Common Shares — The Company has several alternatives to raise equity through the sale of its common shares. As discussed in Note 12, in December 2008, the Company issued $41.9 million of equity capital through its continuous equity program. The Company intends to continue to issue additional shares under this program in 2009. As discussed in Note 22, on February 23, 2009, the Company entered into a stock purchase agreement with Mr. Alexander Otto for the sale of 30 million of the Company’s common shares and warrants for 10 million of the Company’s common shares for


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 additional potential cash in the future. The sale of the common shares and warrants is subject to shareholder approval and the satisfaction or waiver of customary and other conditions. There can be no assurances the Company will be able to obtain such approval or satisfy such conditions. The Company intends to use the estimated $112.5 million in gross proceeds received from this strategic investment in 2009 to reduce leverage.
 
  • Debt Financing and Refinancing — The Company had approximately $372.8 million of consolidated debt maturities during 2009, excluding obligations where there is an extension option. The largest debt maturity in 2009 related to the repayment of senior unsecured notes in the amount of $227.0 million in January 2009. Funding of this repayment was primarily through retained capital and our Revolving Credit Facilities. The remaining $145.8 million in maturities is related to various loans secured by certain shopping centers. The Company plans to refinance approximately $80 million of this remaining indebtedness related to two assets. Furthermore, the Company has received lender approval to extend a mortgage loans aggregating $29.6 million. All three loans are scheduled to mature in the first quarter of 2009. The Company is planning to either repay the remaining maturities with its Revolving Credit Facility or financings discussed below or seek extensions with the existing lender.
 
   The Company is also in active discussions with various life insurance companies regarding the financing of assets that are currently unencumbered. The total loan proceeds are expected to range from $100 million to $200 million depending on the number of assets financed. The loan-to-value ratio required by these lenders is expected to fall within the 50% to 60% range.
 
  • Asset Sales — During the months of January and February 2009, the Company and its consolidated joint ventures sold seven assets generating in excess of $65.8 million in gross proceeds. During 2008, the Company and its joint ventures sold 23 assets generating aggregate gross proceeds of almost $200 million, of which the Company’s proportionate share aggregated $136.1 million. The Company is also in various stages of discussions with third parties for the sale of additional assets with aggregate values in excess of $500 million, including four assets that are under contract or subject to letters of intent, aggregating $30 million, of which the Company’s share is approximately $14 million.
 
  • Debt Repurchases — Given the current economic environment, the Company’s publicly traded debt securities are trading at significant discounts to par. During the fourth quarter of 2008 and in January 2009, the Company repurchased approximately $77.1 million of debt securities at a discount to par aggregating $15.2 million. Although $48 million of this debt repurchase reflected above related to unsecured debt maturing in January 2009 at a small discount, the debt with maturities in 2010 and beyond are trading at much wider discounts. The Company intends to utilize the proceeds from retained capital, equity issuances, secured financing and asset sales, as discussed above, to repurchase its debt securities at a discount to par to further improve its leverage ratios.
 
As further described above, although the Company believes it has several viable alternatives to address its objectives of reducing leverage and continuing to comply with its covenants and repay obligations as they become due, the Company does not have binding agreements for all of the planned transactions discussed above, and therefore, there can be no assurances that the Company will be able to execute these plans, which could adversely impact the Company’s operations including its ability to remain compliant with its covenants.
 
Legal Matters
 
The Company is a party to litigation filed in November 2006 by a tenant in a Company property located in Long Beach, California. The tenant filed suit against the Company and certain affiliates, claiming the Company and its affiliates failed to provide adequate valet parking at the property pursuant to the terms of the lease with the tenant. After a six-week trial, the jury returned a verdict in October 2008, finding the Company liable for compensatory damages in the amount of approximately $7.8 million. The Company strongly disagrees with the verdict and has filed a motion for new trial and a motion for judgment notwithstanding the verdict. In the event the Company’s post-trial motions are unsuccessful, the Company intends to appeal the verdict. The Company recorded a charge during the year ended December 31, 2008, which represents management’s best estimate of loss based upon a range of liability pursuant to SFAS No. 5, “Accounting for Contingencies.” The accrual, as well as the related litigation costs


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incurred to date, was recorded in Other Expense, net in the consolidated statements of operations. The Company will continue to monitor the status of the litigation and revise the estimate of loss as appropriate. Although the Company believes it has meritorious defenses, there can be no assurance that the Company’s post-trial motions will be granted or that an appeal will be successful.
 
In addition to the litigation discussed above, the Company and its subsidiaries are subject to various legal proceedings, which, taken together, are not expected to have a material adverse effect on the Company. The Company is also subject to a variety of legal actions for personal injury or property damage arising in the ordinary course of its business, most of which are covered by insurance. While the resolution of all matters cannot be predicted with certainty, management believes that the final outcome of such legal proceedings and claims will not have a material adverse effect on the Company’s liquidity, financial position or results of operations.
 
Commitments and Guarantees
 
In conjunction with the development and expansion of various shopping centers, the Company has entered into agreements with general contractors for the construction of shopping centers aggregating approximately $111.4 million as of December 31, 2008.
 
At December 31, 2008, the Company had outstanding letters of credit of approximately $77.2 million. The Company has not recorded any obligation associated with these letters of credit. The majority of the letters of credit are collateral for existing indebtedness and other obligations of the Company.
 
In conjunction with certain unconsolidated joint venture agreements, the Companyand/or its equity affiliates have agreed to fund the required capital associated with approved development projects, composed principally of outstanding construction contracts, aggregating approximately $63.3 million as of December 31, 2008. The Companyand/or its equity affiliates are entitled to receive a priority return on these capital advances at rates ranging from 10.5% to 12.0%.
 
In connection with certain of the Company’s unconsolidated joint ventures, the Company agreed to fund amounts due the joint venture’s lender if such amounts are not paid by the joint venture based on the Company’s pro rata share of such amount, aggregating $40.2 million at December 31, 2008.
 
In connection with the transfer of one of the properties to DDR Macquarie Fund in November 2003, the Company deferred the recognition of approximately $2.3 million of the gain on sale of real estate, related to a shortfall agreement guarantee maintained by the Company. DDR Macquarie Fund is obligated to fund any shortfall amount caused by the failure of the landlord or tenant to pay taxes on the shopping center when due and payable. The Company is obligated to pay any shortfall to the extent that the shortfall is not caused by the failure of the landlord or tenant to pay taxes on the shopping center when due and payable. No shortfall payments have been made on this property since the completion of construction in 1997.
 
The Company entered into master lease agreements from 2006 through 2007 in connection with the transfer of properties to certain unconsolidated joint ventures, which are recorded as a liability and reduction of its related gain. The Company is responsible for the monthly base rent, all operating and maintenance expenses and certain tenant improvements and leasing commissions for units not yet leased at closing for a three-year period. At December 31, 2008 and 2007, the Company’s significant master lease obligations, included in accounts payable and other expenses, in the following amounts, were incurred with the properties transferred to the following unconsolidated joint ventures (in millions):
 
         
  December 31, 
  2008  2007 
 
DDR Macquarie Fund LLC
 $—  $0.1 
DDR Markaz II
  0.1   0.2 
DDR MDT PS LLC
  0.3   1.1 
TRT DDR Venture I
  0.5   1.0 
         
  $0.9  $2.4 
         


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In connection with Service Holdings LLC, the Company guaranteed the base rental income from one to three years for various affiliates of Service Holdings LLC in the aggregate amount of $3.0 million. The Company has not recorded a liability for the guarantee, as the subtenants of Service Holdings LLC are paying rent as due. The Company has recourse against the other parties in the partnership in the event of default. No assets of the Company are currently held as collateral to pay this guarantee.
 
As a result of the IRRETI merger, the Company assumed certain environmental and non-recourse obligations of DDR-SAU Retail Fund LLC pursuant to eight guaranty and environmental indemnity agreements. The Company’s guaranty is capped at $43.1 million in the aggregate, except for certain events, such as fraud, intentional misrepresentation or misappropriation of funds.
 
Related to one of the Company’s developments in Long Beach, California, the Company guaranteed the payment of any special taxes levied on the property within the City of Long Beach Community Facilities District No. 6 and attributable to the payment of debt service on the bonds for periods prior to the completion of certain improvements related to this project. In addition, an affiliate of the Company has agreed to make an annual payment of approximately $0.6 million to defray a portion of the operating expenses of a parking garage through the earlier of October 2032 or the date when the city’s parking garage bonds are repaid. No assets of the Company are currently held as collateral related to these obligations. The Company has not recorded a liability for the guarantee.
 
The Company has guaranteed certain special assessment and revenue bonds issued by the Midtown Miami Community Development District. The bond proceeds were used to finance certain infrastructure and parking facility improvements. As of December 31, 2008, the remaining debt service obligation guaranteed by the Company was $10.6 million. In the event of a debt service shortfall, the Company is responsible for satisfying the shortfall. There are no assets held as collateral or liabilities recorded related to these guarantees. To date, tax revenues have exceeded the debt service payments for these bonds.
 
The Company continually monitors obligations and commitments entered into on its behalf. There have been no other material items entered into by the Company since December 31, 2003, through December 31, 2008, other than as described above.
 
Leases
 
The Company is engaged in the operation of shopping centers which are either owned or, with respect to certain shopping centers, operated under long-term ground leases that expire at various dates through 2070, with renewal options. Space in the shopping centers is leased to tenants pursuant to agreements that provide for terms ranging generally from one month to 30 years and, in some cases, for annual rentals subject to upward adjustments based on operating expense levels, sales volume or contractual increases as defined in the lease agreements.
 
The scheduled future minimum revenues from rental properties under the terms of all non-cancelable tenant leases, assuming no new or renegotiated leases or option extensions for such premises for the subsequent five years ending December 31, are as follows for continuing operations (in thousands):
 
     
2009
 $568,085 
2010
  522,242 
2011
  465,346 
2012
  397,698 
2013
  336,481 
Thereafter
  1,570,923 
     
  $3,860,775 
     


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Scheduled minimum rental payments under the terms of all non-cancelable operating leases in which the Company is the lessee, principally for office space and ground leases, for the subsequent five years ending December 31, are as follows for continuing operations (in thousands):
 
     
2009
 $5,317 
2010
  5,008 
2011
  4,947 
2012
  4,493 
2013
  4,017 
Thereafter
  141,652 
     
  $165,434 
     
 
12.  Minority Equity Interests, Operating Partnership Minority Interests, Preferred Shares, Common Shares, Common Shares in Treasury and Deferred Compensation Obligations
 
Minority Equity Interests
 
Minority equity interests consist of the following (in millions):
 
         
  December 31, 
  2008  2007 
 
MV LLC
 $70.2  $74.6 
Shopping centers and development parcels in Arizona, Missouri, Utah and Wisconsin
  15.4   3.8 
Business center in Massachusetts
  —   20.5 
Consolidated joint venture interests primarily outside the United States
  34.5   12.9 
         
  $120.1  $111.8 
         
 
Operating Partnership Minority Interests
 
At December 31, 2008 and 2007, the Company had 398,701 and 861,893 operating partnership minority interests (“OP Units”) outstanding, respectively. These OP Units, issued to different partnerships, are exchangeable, at the election of the OP Unit holder, and under certain circumstances at the option of the Company, into an equivalent number of the Company’s common shares or for the equivalent amount of cash. Most of these OP Units have registration rights agreements equivalent to the amount of OP Units held by the holder if the Company elects to settle in its common shares. The liability for the OP Units is classified on the Company’s balance sheet as operating partnership minority interests.
 
The OP Unit holders are entitled to receive distributions, per OP Unit, generally equal to the per share distributions on the Company’s common shares.
 
In 2008, 0.5 million of OP Units were converted into an equivalent number of common shares of the Company. In 2007, the Company purchased 10,480 OP Units for cash of $0.7 million. In 2006, the Company purchased 32,274 OP Units for cash of $2.1 million. Also in 2006, 0.4 million of OP Units were converted into an equivalent number of common shares of the Company. These transactions were treated as a purchase of minority interest.
 
Preferred Operating Partnership Units
 
In February 2007, a consolidated subsidiary of the Company issued to a designee of Wachovia Bank, N.A. (“Wachovia”) 20 million preferred units (the “Preferred OP Units”), with a liquidation preference of $25 per unit, aggregating $500 million, of one of the net assets of the Company’s consolidated subsidiaries. In accordance with terms of the agreement, the Preferred OP Units were redeemed at 97.0% of par in June 2007 from the proceeds related to the sale of assets.


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Preferred Shares
 
The Company’s preferred shares outstanding at December 31 are as follows (in thousands):
 
         
  2008  2007 
 
Class G — 8.0% cumulative redeemable preferred shares, without par value, $250 liquidation value; 750,000 shares authorized; 720,000 shares issued and outstanding at December 31, 2008 and 2007
 $180,000  $180,000 
Class H — 7.375% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 410,000 shares issued and outstanding at December 31, 2008 and 2007
  205,000   205,000 
Class I — 7.5% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 340,000 shares issued and outstanding at December 31, 2008 and 2007
  170,000   170,000 
         
  $555,000  $555,000 
         
 
In April 2007, the Company redeemed all outstanding shares of its 8.6% Class F Cumulative Redeemable Preferred Shares, aggregating $150 million, at a redemption price of $25.10750 per Class F Preferred Share (the sum of $25 per share and a dividend per share of $0.10750 prorated to the redemption date). The Company recorded a charge to net income applicable to common shareholders of $5.4 million relating to the write-off of the original issuance costs.
 
The Class G depositary shares represent1/10of a preferred share and have a stated value of $250 per share. The Class H and I depositary shares represent1/20of a Class H and Class I preferred share, respectively, and have a stated value of $500 per share. The Class G, Class H and Class I depositary shares are not redeemable by the Company prior to March 28, 2008, July 28, 2008, and May 7, 2009, respectively, except in certain circumstances relating to the preservation of the Company’s status as a REIT.
 
The Company’s authorized preferred shares consist of the following:
 
  • 750,000 Class A Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Class B Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Class C Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Class D Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Class E Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Class F Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Class G Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Class H Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Class I Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Class J Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Class K Cumulative Redeemable Preferred Shares, without par value
 
  • 750,000 Non Cumulative Preferred Shares, without par value
 
Common Shares
 
The Company’s common shares have a $0.10 per share par value.
 
In 2008, the Company issued 8.3 million common shares at a weighted-average price of $4.92 per share and received aggregate net proceeds of approximately $41.9 million. The net cash proceeds received from these issuances were used to repay amounts outstanding on the Company’s Revolving Credit Facilities.


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In December 2006, the Company entered into forward-sale agreements in anticipation of the merger with IRRETI (Note 3). In February 2007, the Company settled this contract and issued an aggregate of 11.6 million of its common shares for approximately $750 million. In February 2007, the Company issued an additional 5.7 million of its common shares as part of the consideration to the IRRETI shareholders (Note 3).
 
Common Shares in Treasury
 
In August 2006 and March 2007, the Company’s Board of Directors authorized the Company to repurchase 909,000 and 1,878,311 common shares, respectively, of the Company’s common stock at a cost of $53.15 per share and $62.29 per share, respectively, in connection with the issuance of the Company’s Senior Convertible Notes in each respective year (Note 8). In June 2007, the Company’s Board of Directors authorized a common share repurchase program. Under the terms of the program, the Company may purchase up to a maximum value of $500 million of its common shares over a two-year period. As of December 31, 2008, the Company had repurchased 5.6 million of its common shares under this program at aweighted-averagecost of $46.66 per share.
 
Deferred Compensation Obligations
 
In 2006, certain officers of the Company completed a stock-for-stock option exercise and received approximately 0.3 million common shares in exchange for 0.2 million common shares of the Company. In addition, vesting of restricted stock grants approximating 0.1 million, 0.1 million and less than 0.1 million common shares in 2008, 2007 and 2006, respectively, was deferred. The Company recorded $4.3 million, $6.7 million and $0.8 million in 2008, 2007 and 2006, respectively, in shareholders’ equity as deferred compensation obligations for the vested restricted stock deferred into the Company’s non-qualified deferred compensation plans.
 
In 2008, deferred obligations aggregating $14.0 million were distributed from the Equity Deferred Compensation Plan (Note 18) to the Chairman of the Board and Chief Executive Officer (“CEO”) of the Company resulting in a reduction of the deferred obligation and corresponding increase inpaid-incapital.
 
13.  Other Revenue
 
Other revenue from continuing operations was composed of the following (in thousands):
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Lease terminations and bankruptcy settlements
 $6,327  $4,961  $13,989 
Acquisition and financing fees(1)
  1,991   7,881   414 
Other
  973   855   454 
             
Total other revenue
 $9,291  $13,697  $14,857 
             
 
 
(1)Includes acquisition fees of $6.3 million earned from the formation of the DDRTC Core Retail Fund LLC in February 2007, excluding the Company’s retained ownership interest. The Company’s fees were earned in conjunction with services rendered by the Company in connection with the acquisition of the IRRETI real estate assets. Financing fees are earned in connection with the formation and refinancing of unconsolidated joint ventures, excluding the Company’s retained ownership interest. The Company’s fees are earned in conjunction with the closing and are based upon the amount of the financing transaction by the joint venture.
 
14.  Impairment Charges and Impairment of Joint Venture Investments
 
In December 2008, due to the continued deterioration of the U.S. capital markets, the lack of liquidity and the related impact on the real estate market and retail industry that accelerated during the fourth quarter of 2008, the Company determined that certain of its consolidated real estate investments and unconsolidated joint venture investments were impaired. As a result, the Company recorded impairment charges of approximately $79.9 million on several consolidated real estate investments, including operating shopping centers and land under development, as determined pursuant to the provisions of SFAS 144. In addition, as discussed in Note 2, the Company recorded impairment charges on several investments in unconsolidated joint ventures of $107.0 million determined pursuant


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to the provisions of APB 18. Investments in unconsolidated joint ventures are considered “financial assets” within the scope of SFAS 157, which was adopted by the Company effective January 1, 2008.
 
Investment Valuation — Consolidated Investments
 
The fair value of real estate investments is estimated based on the price that would be received to sell an asset in an orderly transaction between marketplace participants at the measurement date. The valuation techniques that we used included discounted cash flow analysis, an income capitalization approach on prevailing or earning multiples applied to earnings from the investment, analysis of recent comparable sales transactions, actual sale negotiations and bona fide purchase offers received from third parties and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence. In general, the Company considers multiple valuation techniques when measuring the fair value of an investment. However, in certain circumstances, a single valuation technique may be appropriate. Investments in publicly traded equity securities are valued based on their quoted market prices.
 
The fair value of real estate investments generally reflects estimated sale costs, which may be incurred upon disposition of the real estate investments. Such costs are estimated to approximate 2% to 3% of the estimated sales price.
 
Certain investments in real estate and real estate related investments occur in geographic areas for which no liquid market exists. The market prices for such investments may be volatile and may not be readily ascertainable. In addition, there continues to be significant disruptions in the global capital, credit and real estate markets. These disruptions have led to, among other things, a significant decline in the volume of transaction activity, in the fair value of many real estate and real estate related investments, and a significant contraction in short-term and long-term debt and equity sources. This contraction in capital includes sources that the Company may depend on to finance certain of its real estate investments. These market developments have had a significant adverse impact on the Company’s liquidity position, results of operations and financial condition and may continue to adversely impact the Company if market conditions continue to deteriorate. The decline in liquidity and prices of real estate and real estate related investments, as well as the availability of observable transaction data and inputs, may have made it more difficult to determine the fair value of such investments. As a result, amounts ultimately realized by the Company from investments sold may differ from the fair values presented, and the differences could be material.
 
Measurement of Fair Value—Unconsolidated Investments
 
At December 31, 2008, the Company was required to assess the value of certain of its unconsolidated investments in joint ventures in accordance with SFAS 157. The valuation of these assets is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each asset as well as the income capitalization approach considering prevailing market capitalization rates. The Company reviews each investment based on the highest and best use of the investment and market participation assumptions. For joint ventures with investments in projects under development the significant assumptions included the discount rate, the timing for the construction completion and project stabilization and the exit capitalization rate. For joint ventures with investments in operational real estate assets, the significant assumptions included the capitalization rate used in the income capitalization valuation, as well as projected property net operating income and the valuation of joint venture debt pursuant to SFAS 157. The Company has determined that the significant inputs used to value its unconsolidated joint venture investments with a value of approximately $75.3 million at December 31, 2008, excluding MDT, fall within Level 3. The valuation adjustment of approximately $31.7 million relating to the Company’s investment in MDT was considered to be a Level 1 input, as it was valued based upon a quoted market price on the Australian Stock Exchange.
 
These valuation adjustments were calculated based on market conditions and assumptions made by management at the time the valuation adjustments were recorded, which may differ materially from actual results if market conditions or the underlying assumptions change.


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Items Measured at Fair Value on a Non-Recurring Basis
 
The following table presents information about the Company’s impairment charges on financial assets (in millions) that were measured on a fair value basis for the year ended December 31, 2008. The table indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.
 
                 
  Fair-Value Measurements at December 31, 2008 
  Level 1  Level 2  Level 3  Total 
 
Unconsolidated joint venture investments
 $31.7  $ —  $75.3  $107.0 
 
15.  Discontinued Operations and Disposition of Real Estate and Real Estate Investments
 
Discontinued Operations
 
During the year ended December 31, 2008, the Company sold 22 properties (including one business center and one property held for sale at December 31, 2007) which were classified as discontinued operations for the years ended December 31, 2008, 2007 and 2006, aggregating 1.3 million square feet of Company-owned GLA. The Company had one property considered held for sale at December 31, 2007. Included in discontinued operations for the three years ending December 31, 2008, are 95 properties aggregating 8.4 million square feet of Company-owned GLA. Of these properties, 94 previously had been included in the shopping center segment and one of these properties previously had been included in the business center segment (Note 21). The operations of these properties have been reflected on a comparative basis as discontinued operations in the consolidated financial statements for the three years ended December 31, 2008 included herein.
 
There were no assets designated as held for sale as of December 31, 2008. The balance sheet relating to the assets held for sale and the operating results relating to assets sold or designated as assets held for sale at December 31, 2007, are as follows (in thousands):
 
     
  December 31,
 
  2007 
 
Land
 $3,365 
Building
  2,494 
Other real estate assets
  4 
     
   5,863 
Less: Accumulated depreciation
  (67)
     
Total assets held for sale
 $5,796 
     
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Revenues
 $12,182  $40,553  $51,374 
             
Expenses:
            
Operating
  3,990   11,708   14,990 
Interest, net
  2,331   10,308   14,268 
Depreciation
  4,342   9,929   13,150 
Minority interests
  110   (434)  (440)
             
   10,773   31,511   41,968 
             
Income from discontinued operations
  1,409   9,042   9,406 
(Loss) gain on disposition of real estate, net of tax
  (4,830)  12,260   11,051 
             
  $(3,421) $21,302  $20,457 
             


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The Company sold properties and recorded (losses) gains on dispositions, as described below, for the three years ended December 31, 2008 ($ in millions):
 
         
  Number of
  Gain (loss) on
 
  Properties
  Disposition of
 
  Sold  Real Estate 
 
2008
  22  $(4.8)
2007
  67   12.3 
2006
  6   11.1 
 
Disposition of Real Estate and Real Estate Investments
 
The Company recorded gains on disposition of real estate and real estate investments for the three years ended December 31, 2008, as follows (in millions):
 
             
  For the Year Ended
 
  December 31, 
  2008  2007  2006 
 
Transfer of assets to DDR Domestic Retail Fund I (1)(2)
 $—  $1.8  $— 
Transfer of assets to TRT DDR Venture I (1)(3)
  —   50.3   — 
Transfer of assets to DPG Realty Holdings LLC (1)(4)
  —   —   0.6 
Transfer of assets to DDR Macquarie Fund (1)(5)
  —   —   9.2 
Transfer of assets to the MDT PS LLC (1)(6)
  —   —   38.9 
Transfer of assets to Service Holdings LLC (1)(7)
  —   —   6.1 
Land sales (8)
  6.2   14.0   14.8 
Previously deferred gains and other loss on dispositions (9)
  0.8   2.8   2.4 
             
  $7.0  $68.9  $72.0 
             
 
 
(1)This disposition is not classified as discontinued operations due to the Company’s continuing involvement through its retained ownership interest and management agreements.
 
(2)The Company transferred two wholly-owned assets. The Company did not record a gain on the contribution of 54 assets, as these assets were recently acquired through the merger with IRRETI.
 
(3)The Company transferred three recently developed assets.
 
(4)The Company transferred a newly developed expansion area adjacent to a shopping center owned by the joint venture.
 
(5)The Company transferred three assets in 2007 and newly developed expansion areas adjacent to four shopping centers owned by the joint venture in 2006. The Company did not record a gain on the contribution of three assets in 2007, as these assets were recently acquired through the merger with IRRETI.
 
(6)The Company transferred six recently developed assets.
 
(7)The Company transferred 51 retail sites previously occupied by Service Merchandise.
 
(8)These dispositions did not meet the criteria for discontinued operations, as the land did not have any significant operations prior to disposition.
 
(9)These gains and losses are primarily attributable to the subsequent leasing of units related to master lease and other obligations originally established on disposed properties, which are no longer required.


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16.  Comprehensive (Loss) Income
 
Comprehensive (loss) income is as follows (in thousands):
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Net (loss) income
 $(57,776) $276,047  $253,264 
Other comprehensive (loss) income:
            
Change in fair value of interest rate contracts
  (13,293)  (20,126)  (2,729)
Amortization of interest rate contracts
  (643)  (1,454)  (1,454)
Foreign currency translation
  (44,878)  22,716   1,587 
             
Other comprehensive (loss) income
  (58,814)  1,136   (2,596)
             
Total comprehensive (loss) income
 $(116,590) $277,183  $250,668 
             
 
17.  Transactions with Related Parties
 
In July 2008, the Company purchased a 25.2525% membership interest in RO & SW Realty LLC (“ROSW”), a Delaware limited liability company, from Wolstein Business Enterprises, L.P. (“WBE”), a limited partnership established for the benefit of the children of Scott A. Wolstein, the Company’s CEO and a 50% membership interest in Central Park Solon LLC, an Ohio limited liability company (“Central Park”), from Mr. Wolstein, for $10.0 million. The acquired interests in both ROSW and Central Park are referred to herein as the “Membership Interests”. ROSW is a real estate company that owns 11 properties (the “Properties”). Central Park is a real estate company that owns the development rights relating to a large-scale mixed use project in Solon, Ohio (the “Project”). The Company had identified a number of development projects located near the Properties as well as several value-add opportunities relating to the Properties, including the Project. In October 2008, the Company assumed Mr. Wolstein’s obligation under a promissory note that funded the pre-development expenses of the Project. Mr. Wolstein and his 50% partner, who also holds the remaining membership interest in each of Central Park and ROSW, were jointly and severally liable for the obligations under the promissory note, and they agreed to indemnify each other for 50% of such obligations. The balance of the promissory note was $2.5 million at the effective date of assumption in July 2008, of which the Company is responsible for 50%.
 
The purchase of the Membership Interests by the Company, including the assumption of the promissory note obligations, were approved by a special committee of disinterested directors of the Company who were appointed and authorized by the Nominating and Corporate Governance Committee of the Company’s Board of Directors to review and approve the terms of the acquisition and assumption.
 
The Company accounts for its interest in ROSW and Central Park under the equity method of accounting, and recorded the aggregate $11.3 million acquisition of the Membership Interests as Investments in and Advances to Joint Ventures in the Company’s consolidated balance sheet. In the fourth quarter of 2008 due to deteriorating market conditions, the Company and its partner in Central Park decided not to pursue the Project. As a result, the Company recorded a charge of approximately $3.2 million, representing awrite-offthe purchase price allocated to the Project and the 50% interest in Central Park. In addition, it was determined that approximately $1.9 million of the pre-development costs, assumed upon acquisition and subsequently incurred should be written off as “dead-deal” costs, of which the Company has a 50% interest.
 
In March 2002, the Company entered into a joint venture with Klaff Realty L.P. and Lubert-Adler Real Estate Funds, (which is owned in part by a director of the Company). In August 2006, the Company purchased its then partners’ approximate 75% interest in the remaining 52 assets owned by the joint venture at a gross purchase price of approximately $138 million relating to the partners’ ownership, based on a total valuation of approximately $185 million for all remaining assets, including outstanding indebtedness. The Company sold 51 of the assets to Service Holdings LLC, an unconsolidated joint venture of which the Company owns 20%, in September 2006.
 
As discussed in Note 3, MV LLC purchased one additional site for approximately $11.0 million in 2006, and the Company purchased one additional site for approximately $12.4 million. The assets were acquired from several


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funds, one of which was managed by Lubert-Adler Real Estate Funds, which is owned in part by a director of the Company.
 
The Company has a lease for office space owned by Mr. Wolstein’s mother. General and administrative rental expense associated with this office space aggregated $0.6 million for each of the years ended December 31, 2008, 2007 and 2006. The Company periodically utilizes a conference center owned by the trust of Bert Wolstein, deceased founder of the Company, Mr. Wolstein’s father, and one of the Company’s principal shareholders, for Company-sponsored events and meetings. The Company paid $0.2 million in 2008 and 2007 and less than $0.1 million in 2006 for the use of this facility.
 
Transactions with the Company’s equity affiliates are described in Note 2.
 
18.  Benefit Plans
 
Stock-Based Compensation
 
The Company’s stock option and equity-based award plans provide for grants to Company employees of incentive and non-qualified stock options to purchase common shares of the Company, rights to receive the appreciation in value of common shares, awards of common shares subject to restrictions on transfer, awards of common shares issuable in the future upon satisfaction of certain conditions and rights to purchase common shares and other awards based on common shares. Under the terms of the plans, awards available for grant approximated 3.9 million shares at December 31, 2008. Options may be granted at per-share prices not less than fair market value at the date of grant, and in the case of options, must be exercisable within the maximum contractual term of 10 years thereof (or, with respect to incentive options granted to certain employees, within five years thereof). Options granted under the plans generally vest over three years in one-third increments, beginning one year after the date of grant.
 
In previous years, the Company granted options to its directors. Options are no longer granted to the Company’s directors. Such options were granted at the fair market value on the date of grant. All of the options granted to the directors are currently exercisable.
 
The Company accounts for stock-based awards pursuant to the provisions of SFAS 123(R). The fair values for stock-based awards granted in 2008, 2007 and 2006 were estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
 
       
  For the Year Ended December 31,
  2008 2007 2006
 
Weighted-average fair value of grants
 $3.39 $9.76 $6.50
Risk-free interest rate (range)
 2.0% - 2.9% 4.1% - 4.8% 4.4% - 5.1%
Dividend yield (range)
 6.9% - 9.0% 4.0% - 4.9% 4.2% - 5.0%
Expected life (range)
 3 - 5 years 3 - 5 years 3 - 4 years
Expected volatility (range)
 22.3% - 36.3% 19.2% - 20.3% 19.8% - 20.3%
 
The risk-free rate was based upon a U.S. Treasury Strip with a maturity date that approximates the expected term of the award. The expected life of the award was derived by referring to actual exercise experience. The expected volatility of the stock was derived by referring to changes in the Company’s historical stock prices over a time frame similar to the expected life of the award.


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The following table reflects the stock option activity described above (aggregate intrinsic value in thousands):
 
                     
           Weighted-
    
        Weighted-
  Average
    
        Average
  Remaining
  Aggregate
 
  Number of Options  Exercise
  Contractual
  Intrinsic
 
  Employees  Directors  Price  Term  Value 
 
Balance December 31, 2005
  1,903   62  $32.46         
Granted
  302   —   51.19         
Exercised
  (679)  (20)  29.31         
Forfeited
  (41)  —   42.85         
                     
Balance December 31, 2006
  1,485   42  $37.28         
Granted
  341   —   65.54         
Exercised
  (148)  —   32.22         
Forfeited
  (25)  —   47.21         
                     
Balance December 31, 2007
  1,653   42  $43.37         
Granted
  665   —   37.43         
Exercised
  (51)  (10)  27.01         
Forfeited
  (82)  —   45.31         
                     
Balance December 31, 2008
  2,185   32  $41.97   6.8  $— 
                     
Options exercisable at December 31,
                    
2008
  1,268   32  $40.06   5.3  $— 
2007
  1,003   42   35.67   5.7   5,706 
2006
  616   42   28.75   6.1   22,517 
 
The following table summarizes the characteristics of the options outstanding at December 31, 2008 (in thousands):
 
                     
Options Outstanding       
     Weighted-
     Options Exercisable 
  Outstanding
  Average
  Weighted-
     Weighted-
 
Range of
 as of
  Remaining
  Average
  Exercisable as of
  Average
 
Exercise Prices
 12/31/08  Contractual Life  Exercise Price  12/31/08  Exercise price 
 
$6.88-$13.76
  18   1.4  $13.21   18  $13.21 
$13.77-$20.63
  46   3.0   19.55   46   19.55 
$20.64-$27.51
  173   3.8   22.93   173   22.93 
$27.52-$34.38
  65   6.1   30.11   39   29.61 
$34.39-$41.27
  926   7.7   37.27   311   36.42 
$41.28-$48.15
  404   5.8   41.82   404   41.82 
$48.16-$55.02
  252   6.7   50.97   176   50.94 
$55.03-$61.90
  20   8.0   56.15   12   55.98 
$61.91-$68.78
  313   7.8   65.78   121   65.91 
                     
   2,217   6.7  $41.97   1,300  $40.06 
                     


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The following table reflects the activity for unvested stock option awards for the year ended December 31, 2008 (in thousands):
 
         
     Weighted-
 
     Average
 
     Grant Date
 
  Options  Fair Value 
 
Unvested at December 31, 2007
  650  $7.73 
Granted
  665   3.39 
Vested
  (352)  6.86 
Forfeited
  (46)  5.28 
         
Unvested at December 31, 2008
  917  $5.03 
         
 
As of December 31, 2008, total unrecognized stock option compensation cost of share-based compensation arrangements aggregated $2.8 million. The cost is expected to be recognized over a weighted-average period of approximately two years.
 
Exercises of Employee Stock Options
 
The total intrinsic value of options exercised for the year ended December 31, 2008, was approximately $0.8 million. The total cash received from employees as a result of employee stock option exercises for the year ended December 31, 2008, was approximately $1.6 million. The Company settles employee stock option exercises primarily with newly issued common shares or with treasury shares, if available.
 
Restricted Stock Awards
 
In 2008, 2007 and 2006, the Board of Directors approved grants of 132,394, 89,172 and 64,940 restricted common shares, respectively, to certain executives of the Company. The restricted stock grants vest in equal annual amounts over a five-year period. Restricted stock awards have the same cash dividend and voting rights as other common stock and are considered to be currently issued and outstanding. These grants have a weighted-average fair value at the date of grant ranging from $30.80 to $66.75, which was equal to the market value of the Company’s common shares at the date of grant. In 2008, 2007 and 2006, grants of 16,978; 5,172 and 9,497 common shares, respectively, were issued as compensation to the Company’s outside directors. These grants were issued equal to the market value of the Company’s stock at the date of grant.
 
The following table reflects the activity for unvested restricted stock awards for the year ended December 31, 2008 (awards in thousands):
 
         
     Weighted
 
     Average
 
     Grant Date
 
  Awards  Fair Value 
 
Unvested at December 31, 2007
  146  $54.47 
Granted
  132   37.10 
Vested
  (81)  45.39 
Forfeited
  (4)  48.67 
         
Unvested at December 31, 2008
  193  $46.50 
         
 
As of December 31, 2008, total unrecognized compensation of restricted stock award arrangements granted under the plans aggregated $9.0 million. The cost is expected to be recognized over a weighted-average period of approximately 1.4 years.
 
Performance Units
 
The Board of Directors approved a grant of performance units (“Performance Units”) to the Company’s CEO (in 2000 and 2002), former President (in 2002) and current President (in 2002). Pursuant to the provisions of the


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Performance Units, through 2006 the Performance Units were converted to an aggregate 666,666 restricted common shares based on the annualized total shareholders’ return for the five years then ended. Each of these restricted share grants vests over a five-year period.
 
The fair value of each Performance Unit grant was estimated on the date of grant using a simulation approach based model using the following assumptions:
 
   
  Range
 
Risk-free interest rate
 4.4%-6.4%
Dividend yield
 7.8%-10.9%
Expected life
 10 years
Expected volatility
 20%-23%
 
The following table reflects the activity for the unvested awards for the year ended December 31, 2008 (in thousands):
 
     
  Awards 
 
Unvested at December 31, 2007
  385 
Vested
  (91)
     
Unvested at December 31, 2008
  294 
     
 
As of December 31, 2008, total unrecognized compensation costs of the 2000 and 2002 Performance Units that were granted aggregated $0.1 million and $0.6 million, respectively. The costs are expected to be recognized over one- and three-year terms, respectively.
 
Outperformance Awards
 
In December 2005 and August 2006, the Board of Directors approved grants of outperformance long-term incentive plan agreements (“Outperformance Awards”) with certain executive officers. The outperformance agreements provide for awards of the Company’s common shares, or an equivalent amount in cash, at the Company’s option, to certain officers of the Company if stated performance metrics are achieved.
 
The measurement period for the Company’s CEO and President Executive Officers ended on December 31, 2007. At the end of this measurement period, the Company achieved the FFO Target (a specified level of growth in the Company’s funds from operations), and the Compensation Committee of the Board of Directors (“Committee”) determined that the Senior Executive Officers attained a discretionary metric (non-financial performance criteria established by the Compensation Committee of the Board of Directors of the Company) based on effective development of executives and the successful transition of management responsibilities and duties following the former President of the Company’s departure as an executive officer. The Company, however, did not achieve either metric (based on a total return to the Company’s shareholders target (the “TRS Target”) and a total return to the Company’s shareholders target relative to that of the total return to shareholders of companies included in a specified peer group (the “Comparative TRS Target,” together with the TRS Target, the “TRS Metrics”). Thus, the Committee granted outperformance awards which were converted into 107,879 common shares of the Company to the Senior Executive Officers in 2008.
 
With respect to eight additional executive officers (the “Officers”), the performance metrics are as follows: (a) the FFO Target and (b) the TRS Metrics and together with the FFO Target and the TRS Target, the “Officer Targets.” The measurement period for the Officer Targets is January 1, 2005, through the earlier of December 31, 2009, or the date of a change in control.
 
If the FFO Target is achieved, the Company will issue to each Officer a number of common shares equal to (a) the dollar value assigned to the FFO Target set forth in such officer’s outperformance agreement and (b) divided by the greater of (i) the average closing price for the common shares over the 20 trading days ending on the valuation date (as defined in the outperformance agreements) or (ii) the closing price per common share on the last trading date before the officer valuation date (as defined in the outperformance agreements), or the equivalent amount of cash, at the Company’s option, as soon as practicable following the applicable vesting date, March 1, 2010.


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If one or both of the TRS Metrics are achieved, the Company will issue to each Officer a number of shares set forth in the agreement, depending on whether one or both of the TRS Metrics have been achieved, or the equivalent amount of cash, at the Company’s option, as soon as practicable following the applicable vesting date. The value of the number of common shares or equivalent amount paid in cash with respect to the TRS Metrics that may be paid is capped at an amount specified in each Officer’s outperformance agreement, which management believes does not represent an obligation that is based solely or predominantly on a fixed monetary amount known at the grant date.
 
The fair value of each outperformance unit grant for the share price metrics was estimated on the date of grant using a Monte Carlo approach model based on the following assumptions:
 
   
  Range
 
Risk-free interest rate
 4.4%-5.0%
Dividend yield
 4.4%-4.5%
Expected life
 3-5 years
Expected volatility
 19%-21%
 
As of December 31, 2008, $0.4 million of total unrecognized compensation costs were related to the two market metric components associated with the award granted under the Officers’ outperformance plan and expected to be recognized over a 1.2-year term.
 
2007 Supplemental Equity Program
 
In December 2007, the Board of Directors approved the 2007 Supplemental Equity Program (“2007 Program”) for certain executive officers. The 2007 Program provided for an award pool payable in the Company’s common shares, or an equivalent amount in cash, at the Company’s option, to certain executive officers of the Company if the actual total return on the Company’s common shares during the relevant measurement period exceeds the minimum return. The 2007 Program allowed for measurement periods beginning December 1, 2010, and the final measurement period was through the earlier of December 1, 2012, or the date of a change in control.
 
The 2007 Program provided for the grant of awards to certain executive officers, to be earned based on the satisfaction of certain performance goals over a specified period. Under the 2007 Program certain executive officers had the opportunity to receive, in the form of common shares, a percentage of an award pool created based on the relative and absolute total shareholder return (measured against entities in the North American Real Estate Investment Trust index) during a series of measurement periods extending into 2012 (or until a change in control of the Company). In December 2008, the Committee decided to terminate the 2007 Program because it determined that the program no longer provided any motivational or retention value, and therefore would not help achieve the two goals for which it was created. In connection with the termination of the 2007 Program, as the Committee and the participants agreed to cancel the awards for no consideration and the termination was not accompanied by a concurrent grant of (or offer to grant) replacement awards or other valuable consideration, the Company recorded a non-cash charge of approximately $15.8 million of previously unrecognized compensation cost associated with these awards. The termination was considered a settlement for no consideration pursuant to the provisions of SFAS 123(R). As a result, in 2008 the Company recorded a charge of $15.8 million representing the unrecorded compensation expense based upon the grant date fair value relating to the remaining four years under the 2007 Program relating to its termination. This charge is included in general and administrative expenses in the Company’s consolidated statement of operations.
 
The fair value of each 2007 Program award was estimated on the date of grant using a Monte Carlo approach model based on the following assumptions:
 
   
  Range
 
Risk-free interest rate
 3.4%
Dividend yield
 5.9%
Expected life
 5 years
Expected volatility
 21%
 
During 2008, 2007 and 2006, approximately $29.0 million, $11.0 million and $8.3 million, respectively, was charged to expense associated with awards under the equity-based award plans relating to stock grants, restricted


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stock, Performance Units, Outperformance Awards and 2007 Program. In addition, in 2007 the Company recorded approximately $0.9 million of stock-based compensation in accordance with the provisions of SFAS 123(R) related to the former president’s resignation as an executive officer of the Company, effective May 2007. This charge is included in general and administrative expenses in the Company’s consolidated statement of operations.
 
401(k) Plan
 
The Company has a 401(k) defined contribution plan, covering substantially all of the officers and employees of the Company, that permits participants to defer up to a maximum of 50% of their compensation subject to statutory limits. The Company matches the participant’s contribution in an amount equal to 50% of the participant’s elective deferral for the plan year up to a maximum of 6% of a participant’s base salary plus annual cash bonus, not to exceed the sum of 3% of the participant’s base salary plus annual cash bonus. The Company’s plan allows for the Company to also make additional discretionary contributions. No discretionary contributions have been made. Employees’ contributions are fully vested, and the Company’s matching contributions vest 20% per year over five years. The Company funds all matching contributions with cash. The Company’s contributions for each of the three years ended December 31, 2008, 2007 and 2006, were $1.0 million, $0.8 million and $0.6 million, respectively. The 401(k) plan is fully funded at December 31, 2008.
 
Elective Deferred Compensation Plan
 
The Company has a non-qualified elective deferred compensation plan for certain officers that permits participants to defer up to 100% of their base salaries and annual performance-based cash bonuses, less applicable taxes and benefits deductions. The Company provides a matching contribution to any participant who has contributed the maximum permitted under the 401(k) plan. This matching contribution is equal to the difference between (a) 3% of the sum of the participant’s base salary and annual performance-based bonus deferred under the 401(k) plan and the deferred compensation combined and (b) the actual employer matching contribution under the 401(k) plan. Deferred compensation related to an employee contribution is charged to expense and is fully vested. Deferred compensation related to the Company’s matching contribution is charged to expense and vests 20% per year. Once an employee has been with the Company five years, all matching contributions are fully vested. The Company’s contributions were $0.1 million, $0.2 million and $0.1 million for the three years ended December 31, 2008, 2007 and 2006, respectively. At December 31, 2008, 2007, 2006, deferred compensation under this plan aggregated approximately $3.3 million, $15.6 million and $12.3 million, respectively. The plan is fully funded at December 31, 2008.
 
Equity Deferred Compensation Plan
 
In 2003, the Company established the Developers Diversified Realty Corporation Equity Deferred Compensation Plan (the “Plan”), a non-qualified compensation plan for certain officers and directors of the Company to defer the receipt of restricted shares and, for compensation earned prior to December 31, 2004, the gain otherwise recognizable upon the exercise of options (see Note 12 regarding the deferral of stock to this Plan). At December 31, 2008 and 2007, there were 0.2 million and 0.8 million common shares, respectively, of the Company in the Plan valued at $1.2 million and $29.3 million, respectively. The Plan is fully funded at December 31, 2008.
 
Directors’ Deferred Compensation Plan
 
In 2000, the Company established the Directors’ Deferred Compensation Plan (the “Directors Plan”), a non-qualified compensation plan for the directors of the Company to defer the receipt of quarterly compensation. In 2007, the Company funded this obligation with common shares. At December 31, 2008 and 2007, there were 0.1 million and less than 0.1 million common shares, respectively, of the Company in the Plan valued at $0.6 million and $2.0 million, respectively. The Plan is fully funded at December 31, 2008.
 
Other Compensation
 
During 2006, the Company recorded $0.7 million of charges as additional compensation to the Company’s CEO, relating to an incentive compensation agreement associated with the Company’s investment in the Retail Value Fund Program. Pursuant to this agreement, the Company’s CEO was entitled to receive up to 25% of the distributions made by Coventry I, a consolidated joint venture, provided the Company achieved certain


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performance thresholds in relation to funds from operations growthand/or total shareholder return. This agreement was terminated in January 2007 as part of the Company’s acquisition of Coventry I.
 
19.  Earnings and Dividends Per Share
 
Earnings Per Share (“EPS”) have been computed pursuant to the provisions of SFAS No. 128, “Earnings Per Share.” The following table provides a reconciliation of income from continuing operations and the number of common shares used in the computations of “basic” EPS, which utilizes the weighted average of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares.
 
             
  For the Year Ended December 31,
 
  (In thousands, except per share amounts) 
  2008  2007  2006 
 
(Loss) income from continuing operations
 $(61,317) $185,894  $160,784 
Plus: Gain on disposition of real estate and real estate investments
  6,962   68,851   72,023 
Less: Preferred share dividends
  (42,269)  (50,934)  (55,169)
             
Basic and Diluted — (Loss) income from continuing operations applicable to common shareholders
 $(96,624) $203,811  $177,638 
             
Number of Shares:
            
Basic — Average shares outstanding
  119,843   120,879   109,002 
Effect of dilutive securities:
            
Stock options
  102   456   546 
Restricted stock
  42   162   65 
             
Diluted — Average shares outstanding
  119,987   121,497   109,613 
             
Per share data:
            
Basic earnings per share data:
            
(Loss) income from continuing operations applicable to common shareholders
 $(0.80) $1.68  $1.63 
(Loss) income from discontinued operations
  (0.03)  0.18   0.19 
             
Net (loss) income applicable to common shareholders
 $(0.83) $1.86  $1.82 
             
Diluted earnings per share data:
            
(Loss) income from continuing operations applicable to common shareholders
 $(0.80) $1.67  $1.62 
(Loss) income from discontinued operations
  (0.03)  0.18   0.19 
             
Net (loss) income applicable to common shareholders
 $(0.83) $1.85  $1.81 
             
 
Options to purchase 2.2 million, 1.7 million and 1.5 million common shares were outstanding at December 31, 2008, 2007 and 2006, respectively (Note 18), a portion of which has been reflected above in diluted per share amounts using the treasury stock method. Options aggregating 2.2 million and 0.6 million common shares, respectively, were antidilutive at December 31, 2008 and 2007, and none of the options outstanding at 2006 were antidilutive. Accordingly, the antidilutive options were excluded from the computations.
 
Basic average shares outstanding do not include restricted shares totaling 192,984; 145,980 and 161,958 that were not vested at December 31, 2008, 2007 and 2006, respectively, or Performance Units totaling 294,667, 385,333 and 136,000 that were not vested at December 31, 2008, 2007 and 2006, respectively.
 
The exchange into common shares of the minority interests, associated with OP Units, was not included in the computation of diluted for 2008, 2007 or 2006 because the effect of assuming conversion was antidilutive (Note 12).
 
The Senior Convertible Notes, which are convertible into common shares of the Company with conversion prices of approximately $64.23 and $74.56 at December 31, 2008, were not included in the computation of diluted EPS for 2008 and 2007, and the 2006 Senior Convertible Notes were not included in the computation of diluted EPS


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for the year ended December 31, 2006, as the Company’s stock price did not exceed the strike price of the conversion feature (Note 8).
 
The forward equity contract entered into in December 2006 for 11.6 million common shares of the Company was not included in the computation of diluted for 2006 because the effect of assuming conversion was antidilutive (Note 12). This contract was not outstanding in 2007 or 2008.
 
20.  Federal Income Taxes
 
The Company elected to be treated as a REIT under the Internal Revenue Code of 1986, as amended, commencing with its taxable year ended December 31, 1993. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distribute at least 90% of its taxable income to its shareholders. It is management’s current intention to adhere to these requirements and maintain the Company’s REIT status. As a REIT, the Company generally will not be subject to corporate level federal income tax on taxable income it distributes to its shareholders. As the Company distributed sufficient taxable income for the three years ended December 31, 2008, no U.S. federal income or excise taxes were incurred.
 
If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, at December 31, 2008, the Company has one taxable REIT subsidiary that generates taxable income from non-REIT activities and is subject to federal, state and local income taxes.
 
At December 31, 2008, 2007 and 2006, the tax cost basis of assets was approximately $9.2 billion, $8.8 billion and $7.3 billion, respectively.
 
The following represents the combined activity of the Company’s taxable REIT subsidiary (in thousands):
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Book (loss) income before income taxes
 $(11,605) $47,315  $7,770 
             
Components of income tax (benefit) expense are as follows:
            
Current:
            
Federal
  1,611  $1,188  $3,410 
State and local
  237   1,759   490 
             
   1,848   2,947   3,900 
             
Deferred:
            
Federal
  (18,747)  (12,962)  (6,428)
State and local
  (2,757)  (1,939)  (945)
             
   (21,504)  (14,901)  (7,373)
             
Total benefit
 $(19,656) $(11,954) $(3,473)
             
 
During 2008, the Company recognized a $16.7 million income tax benefit. Approximately $15.6 million of this amount related to the release of valuation allowances associated with deferred tax assets that were established in prior years. These valuation allowances were previously established due to the uncertainty that the deferred tax assets would be utilizable. As of December 31, 2008, the Company has no valuation allowances recorded against its deferred tax assets.
 
In order to maintain its REIT status, the Company must meet certain income tests to ensure that its gross income consists of passive income and not income from the active conduct of a trade or business. The Company utilizes its Taxable REIT Subsidiary to the extent certain fee and other miscellaneous non-real estate related income


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cannot be earned by the REIT. During the third quarter of 2008, the Company began recognizing certain fee and miscellaneous other non-real estate related income within its TRS.
 
Therefore, based on the Company’s evaluation of the current facts and circumstances, the Company determined during the third quarter of 2008 that the valuation allowance should be released, as it was more-likely-than-not that the deferred tax assets would be utilized in future years. This determination was based upon the increase in fee and miscellaneous other non-real estate related income that is projected to be recognized within the Company’s TRS.
 
In 2007, the Company recognized an aggregate income tax benefit of approximately $14.6 million. In the first quarter, the Company recognized $15.4 million of the benefit as a result of the reversal of a previously established valuation allowance against deferred tax assets. The reserves were related to deferred tax assets established in prior years, at which time it was determined that it was more likely than not that the deferred tax asset would not be realized and, therefore, a valuation allowance was required. Several factors were considered in the first quarter of 2007 that contributed to the reversal of the valuation allowance. The most significant factor was the sale of merchant build assets by the Company’s taxable REIT subsidiary in the second quarter of 2007 and similar projected taxable gains for future periods. Other factors included the merger of various taxable REIT subsidiaries and the anticipated profit levels of the Company’s taxable REIT subsidiaries, which will facilitate the realization of the deferred tax assets. Management regularly assesses established reserves and adjusts these reserves when facts and circumstances indicate that a change in estimates is necessary. Based upon these factors, management determined that it is more likely than not that the deferred tax assets will be realized in the future and, accordingly, the valuation allowance recorded against those deferred tax assets is no longer required.
 
The 2006 income tax benefit is primarily attributable to the Company’s ability to deduct intercompany interest costs due to the increased gain on disposition of real estate. The allowance of intercompany interest expense within the Company’s taxable REIT subsidiary is subject to certain intercompany limitations based upon taxable income as required under Internal Revenue Code Section 163(j).
 
The differences between total income tax expense or benefit and the amount computed by applying the statutory federal income tax rate to income before taxes were as follows (in thousands):
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Statutory rate of 34% applied to pre-tax (loss) income
 $(3,946) $16,087  $2,642 
Effect of state and local income taxes, net of federal tax benefit
  (580)  2,366   388 
Valuation allowance decrease
  (17,410)  (22,180)  (13,043)
Other
  2,280   (8,227)  6,540 
             
Total benefit
 $(19,656) $(11,954) $(3,473)
             
Effective tax rate
  169.37%(1)  (25.27)%  (44.70)%
             
 
 
(1)The 2008 effective tax rate includes the discrete impact from the release of the valuation allowance in the third quarter 2008. Without this discrete impact, the effective tax rate is approximately 33.97%.
 
Deferred tax assets and liabilities of the Company’s taxable REIT subsidiary were as follows (in thousands):
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Deferred tax assets (1)
 $45,960  $41,825  $45,100 
Deferred tax liabilities
  (729)  (688)  (237)
Valuation allowance (1)
  —   (17,410)  (36,037)
             
Net deferred tax asset
 $45,231  $23,727  $8,826 
             
 
 
(1)The majority of the deferred tax assets and valuation allowance is attributable to interest expense, subject to limitations and basis differentials in assets due to purchase price accounting.


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Reconciliation of GAAP net income to taxable income is as follows (in thousands):
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
GAAP net (loss) income
 $(57,776) $276,047  $253,264 
Plus: Book depreciation and amortization(1)
  179,015   112,202   93,189 
Less: Tax depreciation and amortization(1)
  (147,606)  (99,894)  (80,852)
Book/tax differences on gains/losses from capital transactions
  1,598   12,384   12,161 
Joint venture equity in earnings, net(1)
  68,856   (4,321)  (41,695)
Dividends from subsidiary REIT investments
  3,640   32,281   33,446 
Deferred income
  13,212   9,471   (2,136)
Compensation expense
  6,892   8,818   (9,215)
Impairment charges
  186,821   —   — 
Miscellaneous book/tax differences, net
  (2,923)  (20,950)  (6,068)
             
Taxable income before adjustments
  251,729   326,038   252,094 
Less: Capital gains
  (1,388)  (116,108)  (69,977)
             
Taxable income subject to the 90% dividend requirement
 $250,341  $209,930  $182,117 
             
 
 
(1)Depreciation expense from majority-owned subsidiaries and affiliates, which are consolidated for financial reporting purposes but not for tax reporting purposes, is included in the reconciliation item “Joint venture equity in earnings, net.”
 
Reconciliation between cash dividends paid and the dividends paid deduction is as follows (in thousands):
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Cash dividends paid
 $366,049  $353,094  $306,929 
Less: Dividends designated to prior year
  (6,967)  (6,967)  (6,900)
Plus: Dividends designated from the following year
  6,967   6,967   6,900 
Less: Portion designated capital gain distribution
  (1,388)  (116,108)  (69,977)
Less: Return of capital
  (114,320)  (27,056)  (54,835)
             
Dividends paid deduction
 $250,341  $209,930  $182,117 
             
 
Characterization of distributions is as follows (per share):
 
             
  For the Year Ended December 31, 
  2008  2007  2006 
 
Ordinary income
 $1.7563  $1.5089  $1.3053 
Capital gains
  0.0098   0.8345   0.5016 
Return of capital
  0.9639   0.2266   0.5031 
             
  $2.7300  $2.5700  $2.3100 
             


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All dividends for each of the years ended December 31, 2007 and 2006, have been allocated and reported to shareholders in the subsequent year. Dividends per share reported to shareholders for the years ended December 31, 2008, 2007 and 2006, are summarized as follows:
 
                     
     Gross
          
2008
 Date
  Ordinary
  Capital Gain
  Return of
  Total
 
Dividends
 Paid  Income  Distributions  Capital  Dividends 
 
4th quarter 2007
  01/08/08  $0.4246  $0.0023  $0.2331  $0.6600 
1st quarter
  04/08/08   0.4439   0.0025   0.2436   0.6900 
2nd quarter
  07/08/08   0.4439   0.0025   0.2436   0.6900 
3rd quarter
  10/07/08   0.4439   0.0025   0.2436   0.6900 
                     
      $1.7563  $0.0098  $0.9639  $2.7300 
                     
 
                     
     Gross
          
2007
 Date
  Ordinary
  Capital Gain
  Return of
  Total
 
Dividends
 Paid  Income  Distributions  Capital  Dividends 
 
4th quarter 2006
  01/08/07  $0.3464  $0.1916  $0.0520  $0.5900 
1st quarter
  04/09/07   0.3875   0.2143   0.0582   0.6600 
2nd quarter
  07/03/07   0.3875   0.2143   0.0582   0.6600 
3rd quarter
  10/02/07   0.3875   0.2143   0.0582   0.6600 
4th quarter
  01/08/08   —   —   —   — 
                     
      $1.5089  $0.8345  $0.2266  $2.5700 
                     
 
                     
     Gross
          
2006
 Date
  Ordinary
  Capital Gain
  Return of
  Total
 
Dividends
 Paid  Income  Distributions  Capital  Dividends 
 
4th quarter 2005
  01/08/06  $0.3051  $0.1173  $0.1176  $0.5400 
1st quarter
  04/03/06   0.3334   0.1281   0.1285   0.5900 
2nd quarter
  07/05/06   0.3334   0.1281   0.1285   0.5900 
3rd quarter
  10/02/06   0.3334   0.1281   0.1285   0.5900 
4th quarter
  01/08/07   —   —   —   — 
                     
      $1.3053  $0.5016  $0.5031  $2.3100 
                     
 
The Company did not pay a dividend in the fourth quarter of 2008.
 
21.  Segment Information
 
The Company had two reportable business segments, shopping centers and other investments, determined in accordance with SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information” (“SFAS 131”). Each shopping center is considered a separate operating segment, and utilizes the accounting policies described in Note 1; however, each shopping center on a stand-alone basis represents less than 10% of the revenues, profit or loss, and assets of the combined reported operating segment and meets the majority of the aggregation criteria under SFAS 131.
 
At December 31, 2008, the shopping center segment consisted of 702 shopping centers (including 329 owned through unconsolidated joint ventures and 40 that are otherwise consolidated by the Company) in 45 states, plus Puerto Rico and Brazil. At December 31, 2007, the shopping center segment consisted of 710 shopping centers (including 317 owned through unconsolidated joint ventures and 40 that are otherwise consolidated by the Company) in 45 states, plus Puerto Rico and Brazil. At December 31, 2006, the shopping center segment consisted of 467 shopping centers (including 167 owned through unconsolidated joint ventures and 39 that are otherwise consolidated by the Company) in 44 states, plus Puerto Rico and Brazil. At December 31, 2008, the Company also


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owned six business centers in four states. At December 31, 2007 and 2006, the Company owned seven business centers in five states.
 
The table below presents information about the Company’s reportable segments for the years ended December 31, 2008, 2007 and 2006 (in thousands):
 
                 
  2008 
  Other
  Shopping
       
  Investments  Centers  Other  Total 
 
Total revenues
 $6,061  $925,411      $931,472 
Operating expenses
  (2,036)  (334,947)      (336,983)
                 
   4,025   590,464       594,489 
Unallocated expenses (1)
         $(577,756)  (577,756)
Equity in net income of joint          ventures (2)
      (89,238)      (89,238)
Minority equity interests
          11,188   11,188 
                 
Loss from continuing operations
             $(61,317)
                 
Total real estate assets
 $49,707  $9,056,928      $9,106,635 
                 
 
                 
  2007 
  Other
  Shopping
       
  Investments  Centers  Other  Total 
 
Total revenues
 $5,198  $927,938      $933,136 
Operating expenses
  (2,077)  (236,760)      (238,837)
                 
   3,121   691,178       694,299 
Unallocated expenses (1)
         $(533,416)  (533,416)
Equity in net income of joint          ventures
      43,229       43,229 
Minority equity interests
          (18,218)  (18,218)
                 
Income from continuing operations
             $185,894 
                 
Total real estate assets
 $101,989  $8,882,749      $8,984,738 
                 
 
                 
  2006 
  Other
  Shopping
       
  Investments  Centers  Other  Total 
 
Total revenues
 $4,437  $768,914      $773,351 
Operating expenses
  (1,923)  (193,597)      (195,520)
                 
   2,514   575,317       577,831 
Unallocated expenses (1)
         $(438,491)  (438,491)
Equity in net income of joint          ventures
      30,337       30,337 
Minority equity interests
          (8,893)  (8,893)
                 
Income from continuing operations
             $160,784 
                 
Total real estate assets
 $90,772  $7,359,921      $7,450,693 
                 
 
 
(1)Unallocated expenses consist of general and administrative, interest income, interest expense, other income/expense, tax benefit/expense and depreciation and amortization as listed in the consolidated statements of operations.
 
(2)Includes impairment of joint venture investments.


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22.  Subsequent Events
 
In January 2009, the Company repaid $227.0 million of unsecuredfixed-ratenotes from borrowings on the Company’s Unsecured Credit Facility.
 
On February 23, 2009, the Company entered into a stock purchase agreement with Mr. Alexander Otto (the “Investor”) to issue and sell 30 million common shares and warrants to purchase up to 10 million common shares with an exercise price of $6.00 per share (the “Warrants”) to the Investor and certain members of his family (collectively with the Investor, the “Otto Family”) for aggregate gross proceeds of approximately $112.5 million. The transaction, if approved and consummated, as further described below, will occur in two closings, each consisting of 15 million common shares and a warrant to purchase five million common shares, provided that the Investor also has the right to purchase all of the common shares and warrants at one closing. The first closing will occur upon the satisfaction or waiver of certain closing conditions including the approval by the Company’s shareholders of the issuance of the Company’s securities and the second closing will occur within six months of the shareholder approval. Under the terms of the stock purchase agreement, the Company will also issue additional common shares to Mr. Otto in an amount equal to any dividends declared by the Company after February 23, 2009 and prior to the applicable closing to which Mr. Otto would have been entitled had the common shares the Investor is purchasing been outstanding on the record dates for any such dividends.
 
The purchase price for the first 15 million common shares will be $3.50 per share, and the purchase price for the second 15 million common shares will be $4.00 per share, regardless of when purchased and regardless of whether or there is one closing or two closings. No separate consideration will be paid by the Investor for the shares issued in respect of dividends. The purchase price for the common shares will be subject to downward adjustment if the weighted average purchase price of all additional common shares (or equivalents thereof) sold by the Company from February 23, 2009 until the applicable closing is less than $2.94 per share (excluding, among other things, common shares payable in connection with any dividends, but including in the calculation all common shares outstanding as of the date of the stock purchase agreement as if issued during such period at $2.94 per share). If the weighted average price for such issuances in the aggregate is less than $2.94, the applicable purchase price will be reduced by an amount equal to the difference between $2.94 and such weighted average price. A five-year warrant for five million shares will be issued for each 15 million common shares purchased by the Investor, for a maximum of 10 million common shares. The warrants have an exercise price of $6.00 per share (subject to downward adjustment pursuant to their terms) and may be exercised on a cashless basis in which we may not receive any consideration upon exercise as the Investor would receive a net amount of shares equivalent to the appreciation in price (if any) of our common stock in excess of $6.00 per share. No separate consideration will be paid for the warrants at closing.
 
Completion of the transactions contemplated by the stock purchase agreement depends upon the satisfaction or waiver of a number of conditions that may be outside of our control, including, but not limited to, the approval of the Company’s shareholders of the securities being issued, the receipt by the Company of additional debt financing and no material adverse change, as defined in the agreement, having occurred. There can be no assurance that we will satisfy all or any of these conditions and, accordingly, there can be no assurance that we will be able to consummate the transaction with the Investor.


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23.  Quarterly Results of Operations (Unaudited)
 
The following table sets forth the quarterly results of operations, as restated for discontinued operations, for the years ended December 31, 2008 and 2007 (in thousands, except per share amounts):
 
                     
  First  Second  Third  Fourth  Total 
 
2008
                    
Revenues
 $237,940  $229,424  $232,909  $231,199  $931,472 
Net income (loss)
  43,424   39,927   38,515   (179,642)  (57,776)
Net income (loss) applicable to common shareholders
  32,857   29,360   27,948   (190,210)  (100,045)
Basic:
                    
Net income (loss) per common share
 $0.28  $0.25  $0.23  $(1.57) $(0.83)
Weighted average number of shares
  119,148   119,390   119,795   121,019   119,843 
Diluted:
                    
Net income (loss) per common share
 $0.28  $0.25  $0.23  $(1.57) $(0.83)
Weighted average number of shares
  119,349   119,568   119,882   121,019   119,987 
2007
                    
Revenues
 $217,687  $249,398  $230,506  $235,545  $933,136 
Net income
  62,536   127,437   43,283   42,791   276,047 
Net income applicable to common shareholders
  48,744   111,429   32,716   32,224   225,113 
Basic:
                    
Net income per common share
 $0.42  $0.90  $0.27  $0.27  $1.86 
Weighted average number of shares
  114,851   124,455   123,329   120,786   120,879 
Diluted:
                    
Net income per common share
 $0.42  $0.89  $0.26  $0.27  $1.85 
Weighted average number of shares
  115,661   125,926   123,727   121,103   121,497 


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Price Range of Common Shares (Unaudited)
 
The high and low sales prices per share of the Company’s common shares, as reported on the New York Stock Exchange composite tape, and declared dividends per share for the quarterly periods indicated, were as follows:
 
             
  High  Low  Dividends 
 
2008
            
First
 $44.31  $32.20  $0.69 
Second
  45.66   34.44   0.69 
Third
  41.55   27.60   0.69 
Fourth
  31.50   1.73   — 
2007
            
First
 $72.33  $61.43  $0.66 
Second
  66.70   50.75   0.66 
Third
  56.85   46.28   0.66 
Fourth
  59.27   37.42   0.66 
 
As of February 13, 2009, there were approximately 9,655 record holders and approximately 44,000 beneficial owners of the Company’s common shares.


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SCHEDULE II
 
DEVELOPERS DIVERSIFIED REALTY CORPORATION
 
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the years ended December 31, 2008, 2007 and 2006
(In thousands)
 
                 
  Balance at
  Charged to
       
  Beginning of
  (Income)
     Balance at
 
  Year  Expense  Deductions  End of Year 
 
Year ended December 31, 2008
                
Allowance for uncollectible accounts (1)
 $34,163  $24,343  $19,498  $39,008 
                 
Valuation allowance for a deferred tax asset
 $17,410  $(17,410) $—  $— 
                 
Year ended December 31, 2007
                
Allowance for uncollectible accounts (1)
 $18,024  $9,133  $(7,006)* $34,163 
                 
Valuation allowance for a deferred tax asset
 $36,037  $(22,180) $(3,553) $17,410 
                 
Year ended December 31, 2006
                
Allowance for uncollectible accounts (1)
 $21,408  $7,498  $10,882  $18,024 
                 
Valuation allowance for a deferred tax asset
 $49,080  $(13,043) $—  $36,037 
                 
 
*  Includes reserves associated with the IRRETI merger.
 
(1) Includes reserves associated with discontinued operations andstraight-linerental revenues.


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Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Brandon, FL
 $0  $4,111  $0  $0  $6,363   6,363  $4,903  $1,461  $0   S/L 30.0   1972(C) 
Stow, OH
  1,036   9,028   0   993   33,497   34,490   10,307   24,182   0   S/L 30.0   1969(C) 
Westlake, OH
  424   3,803   203   424   10,003   10,427   5,554   4,874   0   S/L 30.0   1974(C) 
E. Norrition, PA
  80   4,698   233   70   8,744   8,814   6,201   2,613   0   S/L 30.0   1975(C) 
Palm Harbor, FL
  1,137   4,089   0   1,137   4,168   5,305   1,840   3,464   0   S/L 31.5   1995(A) 
Tarpon Springs, FL
  248   7,382   81   244   11,955   12,199   9,124   3,074   0   S/L 30.0   1974(C) 
Bayonet Pt., FL
  2,113   8,181   128   1,806   11,632   13,438   7,268   6,169   0   S/L 30.0   1985(C) 
McHenry, IL
  963   3,949   0   10,648   41,067   51,715   1,897   49,818   0   S/L 31.5   2006(C) 
Miami, FL
  11,626   30,457   0   24,860   79,335   104,195   4,833   99,362   0   S/L 31.5   2006(C) 
San Antonio, TX (Village)
  3,370   21,033   0   2,505   25,865   28,370   806   27,564   0   S/L 31.5   2007(C) 
Starkville, MS
  1,271   8,209   0   703   6,683   7,386   2,680   4,706   0   S/L 31.5   1994(A) 
Gulfport, MS
  8,795   36,370   0   0   49,999   49,999   8,885   41,114   0   S/L 31.5   2003(A) 
Tupelo, MS
  2,282   14,979   0   2,213   17,556   19,769   7,458   12,312   0   S/L 31.5   1994(A) 
Jacksonville, FL
  3,005   9,425   0   3,028   9,948   12,976   4,388   8,588   0   S/L 31.5   1995(A) 
Long Beach, CA (Pike)
  0   111,512   0   0   134,217   134,217   18,902   115,314   0   S/L 31.5   2005(C) 
Brunswick, MA
  3,836   15,459   0   3,796   19,338   23,134   6,925   16,209   0   S/L 30.0   1973(C) 
Oceanside, CA
  0   10,643   0   0   14,444   14,444   3,534   10,909   0   S/L 31.5   2000(C) 
Reno, NV
  0   366   0   1,132   4,699   5,831   625   5,206   3,296   S/L 31.5   2000(C) 
Everett, MA
  9,311   44,647   0   9,462   50,294   59,756   11,684   48,072   0   S/L 31.5   2001(C) 
Pasadena, CA
  47,215   101,475   2,053   47,360   105,307   152,667   10,640   142,027   79,100   S/L 31.5   2003(A) 
Salisbury, MD
  1,531   9,174   174   1,531   9,585   11,116   2,830   8,286   0   S/L 31.5   1999(C) 
Salisbury, MD
  539   3,321   104   540   3,433   3,973   344   3,629   0   S/L 31.5   1999(C) 
Atlanta, GA
  475   9,374   0   475   10,122   10,597   4,778   5,820   0   S/L 31.5   1994(A) 
Jackson, MS
  4,190   6,783   0   4,190   6,838   11,028   1,345   9,684   0   S/L 31.5   2003(A) 
Freehold, NJ
  2,460   2,475   0   2,460   2,478   4,938   37   4,901   0   S/L 31.5   1994(A) 
Opelika, AL
  3,183   11,666   0   2,415   7,948   10,363   3,632   6,731   0   S/L 31.5   2003(A) 
Scottsboro, AL
  788   2,781   0   788   2,793   3,581   545   3,036   0   S/L 31.5   2003(A) 
Gulf Breeze, FL
  2,485   2,214   0   2,485   2,239   4,724   449   4,275   0   S/L 31.5   2003(A) 
Apex, NC (South)
  9,576   43,619   0   10,521   51,021   61,542   3,570   57,972   0   S/L 31.5   2006(C) 
Ocala, FL
  1,916   3,893   0   1,916   6,002   7,918   952   6,967   0   S/L 31.5   2003(A) 
Tallahassee, FL
  1,881   2,956   0   1,881   6,681   8,562   1,027   7,535   0   S/L 31.5   2003(A) 
Chamblee, GA
  5,862   5,971   0   5,862   6,338   12,200   1,349   10,850   0   S/L 31.5   2003(A) 
Cumming, GA (Marketplace)
  14,255   23,653   0   14,249   23,863   38,112   4,645   33,467   0   S/L 31.5   2003(A) 


F-61

Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Douglasville, GA
  3,856   9,625   0   3,540   9,723   13,263   1,926   11,337   0   S/L 31.5   2003(A) 
Athens, GA
  1,649   2,084   0   1,477   2,103   3,580   412   3,168   0   S/L 31.5   2003(A) 
Griffin, GA
  138   2,638   0   138   2,699   2,837   527   2,309   0   S/L 31.5   2003(A) 
Columbus, GA
  4,220   8,159   0   4,220   8,274   12,494   1,621   10,873   0   S/L 31.5   2003(A) 
Newnan, GA
  2,632   11,063   0   2,620   11,594   14,214   2,206   12,008   0   S/L 31.5   2003(A) 
Union City, GA
  2,288   6,246   0   2,288   7,172   9,460   1,503   7,957   0   S/L 31.5   2003(A) 
Warner Robins, GA
  5,977   7,459   0   5,729   7,613   13,342   1,503   11,840   0   S/L 31.5   2003(A) 
Woodstock, GA
  2,022   8,440   0   1,199   1,408   2,607   120   2,487   0   S/L 31.5   2003(A) 
Fayetteville, NC
  8,524   10,627   0   8,524   14,216   22,740   2,188   20,552   0   S/L 31.5   2003(A) 
Charleston, SC
  3,479   9,850   0   3,479   10,033   13,512   4,400   9,112   0   S/L 31.5   2003(A) 
Denver, CO (University)
  20,733   22,818   0   20,804   23,656   44,460   4,651   39,809   26,545   S/L 31.5   2003(A) 
Chattanooga, TN
  1,845   13,214   0   1,845   15,365   17,210   3,110   14,100   0   S/L 31.5   2003(A) 
Hendersonville, TN
  3,743   9,268   0   3,607   9,335   12,942   1,802   11,140   7,691   S/L 31.5   2003(A) 
Johnson City, TN
  124   521   0   0   2,180   2,180   188   1,992   0   S/L 31.5   2003(A) 
Chester, VA
  10,780   4,752   0   10,780   5,065   15,845   1,028   14,818   0   S/L 31.5   2003(A) 
Lynchburg,VA
  5,447   11,194   0   5,447   11,820   17,267   2,453   14,814   0   S/L 31.5   2003(A) 
Brookfield, WI
  588   0   0   588   2,864   3,452   168   3,285   0   S/L 31.5   2003(A) 
Milwaukee, WI
  4,527   3,600   0   4,527   4,800   9,327   803   8,524   0   S/L 31.5   2003(A) 
Gallipolis, OH
  1,249   1,790   0   1,249   1,986   3,235   372   2,864   0   S/L 31.5   2003(A) 
Lexington, KY (South)
  3,344   2,805   0   3,344   2,805   6,149   558   5,591   0   S/L 31.5   2003(A) 
Lexington, KY (North)
  2,915   3,447   0   2,919   3,394   6,313   774   5,539   0   S/L 31.5   2003(A) 
Richmond, KY
  1,870   5,661   0   1,870   7,308   9,178   1,254   7,923   0   S/L 31.5   2003(A) 
Allentown, PA
  5,882   20,060   0   5,882   22,757   28,639   4,017   24,622   15,899   S/L 31.5   2003(A) 
St. John, MO
  2,613   7,040   0   2,827   7,899   10,726   1,414   9,312   0   S/L 31.5   2003(A) 
Suwanee, GA
  13,479   23,923   0   13,479   28,708   42,187   5,519   36,667   0   S/L 31.5   2003(A) 
West Allis, WI
  2,452   10,982   0   2,452   11,537   13,989   2,151   11,837   0   S/L 31.5   2003(A) 
Chesterfield, MI
  566   2,324   0   382   2,327   2,709   209   2,499   0   S/L 31.5   2006(A) 
Ft. Collins, CO
  2,767   2,054   0   1,129   4,506   5,635   756   4,879   0   S/L 31.5   2003(A) 
Lafayette, IN
  1,217   2,689   0   1,217   2,705   3,922   537   3,385   0   S/L 31.5   2003(A) 
Hamilton, NJ
  8,039   49,896   0   11,774   79,596   91,370   11,937   79,434   0   S/L 31.5   2003(A) 
Lansing, MI
  1,598   6,999   0   1,801   11,478   13,279   1,750   11,529   0   S/L 31.5   2003(A) 
Erie, PA (Peach)
  10,880   19,201   0   6,373   44,194   50,567   16,850   33,717   27,195   S/L 31.5   1995(C) 
Erie, PA (Hills)
  0   2,564   13   723   3,834   4,557   3,168   1,390   0   S/L 30.0   1973(C) 

F-62

Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
San Francisco, CA
  15,332   35,803   0   10,456   24,423   34,879   3,462   31,417   0   S/L 31.5   2002(A) 
Chillicothe, OH
  43   2,549   2   1,170   4,366   5,536   1,837   3,698   0   S/L 30.0   1974(C) 
Phoenix, AZ
  18,701   18,811   118   18,701   19,287   37,988   1,663   36,324   16,733   S/L 30.0   1999(A) 
Martinsville, VA
  3,163   28,819   0   3,163   29,683   32,846   16,537   16,309   18,936   S/L 30.0   1989(C) 
Tampa, FL (Waters)
  4,105   6,640   324   3,905   8,249   12,154   4,660   7,494   0   S/L 31.5   1990(C) 
Macedonia, OH (Phase II)
  4,392   10,885   0   4,392   10,996   15,388   3,353   12,035   0   S/L 31.5   1998(C) 
Huber Hts, OH
  757   14,469   1   757   25,105   25,862   7,743   18,119   0   S/L 31.5   1993(A) 
Lebanon, OH
  651   911   31   812   1,428   2,240   446   1,795   0   S/L 31.5   1993(A) 
Xenia, OH
  948   3,938   0   673   6,039   6,712   2,623   4,089   0   S/L 31.5   1994(A) 
Boardman, OH
  9,025   27,983   0   8,152   28,233   36,385   10,188   26,197   25,320   S/L 31.5   1997(A) 
Solon, OH
  6,220   7,454   0   6,220   21,628   27,848   6,601   21,248   0   S/L 31.5   1998(C) 
Cincinnati, OH
  2,399   11,238   172   2,399   14,132   16,531   6,889   9,642   0   S/L 31.5   1993(A) 
Bedford, IN
  706   8,425   6   1,067   10,596   11,663   4,784   6,879   0   S/L 31.5   1993(A) 
Watertown, SD
  63   6,443   442   63   12,579   12,642   8,503   4,138   0   S/L 30.0   1977(C) 
Pensacola, FL
  1,805   4,010   273   816   3,142   3,958   1,030   2,928   0   S/L 30.0   1988(C) 
Los Alamos, NM
  725   3,500   30   725   4,921   5,646   3,749   1,897   0   S/L 30.0   1978(C) 
St. Louis, MO (Sunset)
  12,791   38,404   0   13,403   44,319   57,722   15,542   42,180   32,822   S/L 31.5   1998(A) 
St. Louis, MO (Brentwood)
  10,628   32,053   0   10,018   32,400   42,418   10,923   31,494   24,382   S/L 31.5   1998(A) 
Cedar Rapids, IA
  4,219   12,697   0   4,219   13,969   18,188   4,805   13,383   8,609   S/L 31.5   1998(A) 
St. Louis, MO (Olympic)
  2,775   8,370   0   2,775   10,356   13,131   3,939   9,192   0   S/L 31.5   1998(A) 
St. Louis, MO (Gravois)
  1,336   4,050   0   1,525   4,925   6,450   1,673   4,777   448   S/L 31.5   1998(A) 
St. Louis, MO (Morris)
  0   2,048   0   0   2,143   2,143   773   1,369   0   S/L 31.5   1998(A) 
St. Louis, MO (Southtowne)
  4,159   3,818   0   5,403   7,783   13,186   1,048   12,138   0   S/L 31.5   2004(C) 
Aurora, OH
  832   7,560   0   1,592   14,043   15,635   4,709   10,926   0   S/L 31.5   1995(C) 
Nampa, ID
  1,395   8,563   0   1,395   8,563   9,958   386   9,573   0   S/L 31.5   2007(A) 
Idaho Falls, ID (DDRC)
  1,302   5,703   0   1,418   6,414   7,832   2,399   5,433   0   S/L 31.5   1998(A) 
Mount Vernon, IL
  1,789   9,399   111   1,789   16,769   18,558   7,157   11,401   0   S/L 31.5   1993(A) 
Fenton, MO
  414   4,244   476   430   7,541   7,971   5,057   2,914   0   S/L 30.0   1983(A) 
Simpsonville, SC
  431   6,563   0   417   6,828   7,245   3,329   3,917   0   S/L 31.5   1994(A) 
Cambden, SC
  627   7,519   7   1,021   10,908   11,929   5,230   6,699   0   S/L 31.5   1993(A) 
N. Charleston, SC
  911   11,346   1   1,081   16,853   17,934   8,122   9,813   0   S/L 31.5   1993(A) 
Orangeburg, SC
  318   1,693   0   318   3,445   3,763   1,298   2,465   0   S/L 31.5   1995(A) 
MT. Pleasant, SC
  2,584   10,470   0   2,430   17,673   20,103   6,189   13,913   0   S/L 31.5   1995(A) 

F-63

Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Sault ST. Marie, MI
  1,826   13,710   0   1,826   15,219   17,045   6,811   10,234   0   S/L 31.5   1994(A) 
Cheboygan, MI
  127   3,612   0   127   4,131   4,258   1,917   2,340   0   S/L 31.5   1993(A) 
Walker, MI (Grand Rapids)
  1,926   8,039   0   1,926   8,924   10,850   3,679   7,171   0   S/L 31.5   1995(A) 
Detroit, MI
  6,738   26,988   27   6,738   17,308   24,046   15,847   8,200   0   S/L 31.5   1998(A) 
Houghton, MI
  440   7,301   1,821   413   13,807   14,220   10,409   3,811   0   S/L 30.0   1980(C) 
Bad Axe, MI
  184   3,647   0   184   4,433   4,617   1,981   2,636   0   S/L 31.5   1993(A) 
Gaylord, MI
  270   8,728   2   251   10,801   11,052   4,914   6,138   0   S/L 31.5   1993(A) 
Howell, MI
  332   11,938   1   332   16,160   16,492   6,798   9,693   0   S/L 31.5   1993(A) 
Mt. Pleasant, MI
  767   7,769   20   1,142   13,670   14,812   6,682   8,130   0   S/L 31.5   1993(A) 
Elyria, OH
  352   5,693   0   352   8,469   8,821   4,653   4,168   0   S/L 30.0   1977(C) 
Meridian, ID
  24,591   31,779   0   24,841   60,210   85,051   10,473   74,578   37,200   S/L 31.5   2001(C) 
Midvale, UT (FT. Union I, II, III & Wingers)
  25,662   56,759   0   28,393   73,823   102,216   20,158   82,058   0   S/L 31.5   1998(A) 
Taylorsville, UT
  24,327   53,686   0   31,368   76,893   108,261   22,642   85,619   0   S/L 31.5   1998(A) 
Orem, UT
  5,428   12,259   0   5,428   13,195   18,623   4,454   14,170   0   S/L 31.5   1998(A) 
Salt Lake City, UT (33rd)
  986   2,132   0   986   2,285   3,271   752   2,519   0   S/L 31.5   1998(A) 
Riverdale, UT
  15,845   36,479   0   15,845   43,423   59,268   14,501   44,767   0   S/L 31.5   1998(A) 
Bemidji, MN
  442   8,229   500   442   11,570   12,012   8,496   3,517   0   S/L 30.0   1977(C) 
Salt Lake City, UT
  2,801   5,997   0   2,801   6,888   9,689   2,430   7,260   0   S/L 31.5   1998(A) 
Ogden, UT
  3,620   7,716   0   3,620   8,414   12,034   2,826   9,207   0   S/L 31.5   1998(A) 
Birmingham, AL Eastwood)
  3,726   13,974   0   3,726   17,129   20,855   7,472   13,384   0   S/L 31.5   1994(A) 
Birmingham, Al (Brookhighland)
  10,573   26,002   0   11,434   51,440   62,874   16,713   46,161   0   S/L 31.5   1995(A) 
Ormond Beach, FL
  1,048   15,812   4   1,048   18,025   19,073   8,104   10,969   0   S/L 31.5   1994(A) 
Antioch, CA
  3,066   12,220   0   3,066   6,308   9,374   983   8,391   0   S/L 40.0   2005(A) 
Santa Rosa, CA
  3,783   15,964   0   3,783   14,869   18,652   1,284   17,367   0   S/L 40.0   2005(A) 
San Diego, CA (College)
  0   11,079   55   0   9,465   9,465   804   8,661   0   S/L 40.0   2005(A) 
Las Vegas, NV
  6,458   3,488   0   6,458   2,939   9,397   275   9,121   0   S/L 40.0   2005(A) 
West Covina, CA
  0   20,456   0   0   19,341   19,341   1,650   17,691   0   S/L 40.0   2005(A) 
Phoenix, AZ
  2,443   6,221   0   2,443   5,633   8,076   497   7,578   0   S/L 40.0   2005(A) 
Fairfield, CA
  9,140   11,514   0   9,140   4,941   14,081   922   13,159   0   S/L 40.0   2005(A) 
Garden Grove, CA
  4,955   5,392   0   4,955   4,853   9,808   430   9,378   0   S/L 40.0   2005(A) 
San Diego, CA
  5,508   8,294   0   5,508   3,394   8,902   665   8,237   0   S/L 40.0   2005(A) 
Carson City, NV
  1,928   4,841   0   1,928   4,450   6,378   387   5,992   0   S/L 40.0   2005(A) 

F-64

Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Tucson, AZ
  1,938   4,151   0   1,938   3,785   5,723   330   5,393   0   S/L 40.0   2005(A) 
Redding, CA
  1,978   5,831   0   1,978   5,384   7,362   467   6,895   0   S/L 40.0   2005(A) 
San Antonio, TX
  2,403   2,697   0   2,403   2,387   4,790   213   4,577   0   S/L 40.0   2005(A) 
Chandler, AZ
  2,136   5,831   0   2,136   5,349   7,485   466   7,019   0   S/L 40.0   2005(A) 
Chino, CA
  4,974   7,052   0   4,974   2,948   7,922   564   7,358   0   S/L 40.0   2005(A) 
Las Vegas, NV
  2,621   6,039   0   2,621   5,546   8,167   483   7,684   0   S/L 40.0   2005(A) 
Clovis, CA
  0   9,057   0   0   7,809   7,809   728   7,081   0   S/L 40.0   2005(A) 
Santa Maria, CA
  1,117   8,736   0   1,117   8,185   9,302   701   8,601   0   S/L 40.0   2005(A) 
El Cajon, CA
  0   15,648   0   0   14,743   14,743   1,260   13,483   0   S/L 40.0   2005(A) 
Ukiah, CA
  1,632   2,368   0   1,632   2,133   3,765   187   3,577   0   S/L 40.0   2005(A) 
Madera, CA
  1,770   746   0   1,770   603   2,373   56   2,317   0   S/L 40.0   2005(A) 
Mesa, AZ
  2,551   11,951   0   2,551   11,123   13,674   960   12,714   0   S/L 40.0   2005(A) 
Burbank, CA
  0   20,834   0   0   19,661   19,661   1,637   18,024   0   S/L 40.0   2005(A) 
North Fullerton, CA
  4,163   5,980   0   4,163   5,427   9,590   478   9,113   0   S/L 40.0   2005(A) 
Tulare, CA
  2,868   4,200   0   2,868   3,793   6,661   335   6,326   0   S/L 40.0   2005(A) 
Porterville, CA
  1,681   4,408   0   1,681   4,038   5,719   351   5,368   0   S/L 40.0   2005(A) 
Lompac, CA
  2,275   2,074   0   2,275   1,821   4,096   163   3,932   0   S/L 40.0   2005(A) 
Palmdale, CA
  4,589   6,544   0   4,589   5,949   10,538   523   10,014   0   S/L 40.0   2005(A) 
Anaheim, CA
  8,900   11,925   0   8,900   7,578   16,478   958   15,520   0   S/L 40.0   2005(A) 
Sonora, CA
  1,889   6,860   0   1,889   5,100   6,989   550   6,439   0   S/L 40.0   2005(A) 
Phoenix, AZ
  2,334   8,453   0   2,334   7,835   10,169   678   9,491   0   S/L 40.0   2005(A) 
Foot Hill Ranch, CA
  5,409   9,383   0   5,409   2,631   8,040   753   7,288   0   S/L 40.0   2005(A) 
Reno, NV
  2,695   5,078   0   2,695   4,629   7,324   405   6,919   0   S/L 40.0   2005(A) 
Las Vegas, NV
  5,736   5,795   0   5,736   3,429   9,165   462   8,703   0   S/L 40.0   2005(A) 
Folsom, CA
  3,461   11,036   0   3,461   10,205   13,666   886   12,779   0   S/L 40.0   2005(A) 
Slatten Ranch, CA
  5,439   11,728   0   5,439   8,379   13,818   942   12,877   0   S/L 40.0   2005(A) 
Buffalo, NY
  2,341   8,995   0   2,341   9,580   11,921   1,461   10,460   0   S/L 31.5   2004(A) 
West Seneca, NY
  2,929   12,926   0   2,929   12,941   15,870   1,945   13,925   0   S/L 31.5   2004(A) 
N. Tonawanda, NY
  5,878   21,291   0   5,878   22,480   28,358   3,516   24,842   0   S/L 31.5   2004(A) 
Amherst, NY
  5,873   22,458   0   5,873   23,225   29,098   3,508   25,590   0   S/L 31.5   2004(A) 
Ithaca, NY
  9,198   42,969   0   9,198   43,150   52,348   6,393   45,955   15,933   S/L 31.5   2004(A) 
Hamburg, NY
  3,303   16,239   0   3,303   16,766   20,069   2,653   17,415   0   S/L 31.5   2004(A) 
West Seneca, NY
  2,576   2,590   0   2,576   3,530   6,106   485   5,622   0   S/L 31.5   2004(A) 

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Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Orland Park, IL
  10,430   13,081   0   10,430   13,101   23,531   1,991   21,540   0   S/L 31.5   2004(A) 
Hamburg, NY
  4,071   17,142   0   4,071   17,155   21,226   2,605   18,621   0   S/L 31.5   2004(A) 
Tonawanda, NY
  3,061   6,887   0   3,061   7,683   10,744   1,154   9,590   0   S/L 31.5   2004(A) 
Hamburg, NY
  4,152   22,075   0   4,152   22,660   26,812   3,317   23,495   0   S/L 31.5   2004(A) 
Columbus, OH (Consumer Square)
  9,828   22,858   0   9,828   23,371   33,199   3,637   29,563   12,544   S/L 31.5   2004(A) 
Louisville, KY (Outer Loop)
  4,180   747   0   4,180   1,010   5,190   184   5,006   0   S/L 31.5   2004(A) 
Olean, NY
  8,834   29,813   0   8,834   30,525   39,359   4,982   34,376   3,662   S/L 31.5   2004(A) 
N. Charleston, SC (N Charl Ctr)
  5,146   5,990   0   5,146   8,456   13,602   1,255   12,347   10,027   S/L 31.5   2004(A) 
Jacsonville, FL (Arlington Road)
  4,672   5,085   0   4,672   (509)  4,163   857   3,306   0   S/L 31.5   2004(A) 
West Long Branch, NJ (Monmouth)
  14,131   51,982   0   14,131   53,716   67,847   7,885   59,963   9,597   S/L 31.5   2004(A) 
Big Flats, NY (Big Flats I)
  22,229   52,579   0   22,279   56,185   78,464   9,852   68,612   8,289   S/L 31.5   2004(A) 
Hanover, PA
  4,408   4,707   0   4,408   4,707   9,115   750   8,365   0   S/L 31.5   2004(A) 
Mays Landing, NJ (Wrangelboro)
  49,033   107,230   0   49,033   109,194   158,227   16,436   141,791   43,475   S/L 31.5   2004(A) 
Plattsburgh, NY
  10,734   34,028   0   10,767   35,296   46,063   5,697   40,366   4,458   S/L 31.5   2004(A) 
Williamsville, NY
  5,021   6,768   0   5,021   8,335   13,356   1,172   12,184   0   S/L 31.5   2004(A) 
Niagara Falls, NY
  4,956   11,370   0   1,973   3,191   5,164   493   4,671   0   S/L 31.5   2004(A) 
Amherst, NY
  29,729   78,602   0   28,672   73,602   102,274   11,360   90,914   20,875   S/L 31.5   2004(A) 
Greece, NY
  3,901   4,922   0   3,901   4,922   8,823   751   8,071   0   S/L 31.5   2004(A) 
Buffalo, NY (Elmwood)
  6,010   19,044   0   6,010   19,100   25,110   2,866   22,244   0   S/L 31.5   2004(A) 
Orange Park, FL (The Village)
  1,929   5,476   0   1,929   5,515   7,444   835   6,609   0   S/L 31.5   2004(A) 
Lakeland, FL (Highlands)
  4,112   4,328   0   4,112   4,425   8,537   683   7,854   0   S/L 31.5   2004(A) 
Lockport, NY
  9,253   23,829   0   9,253   24,121   33,374   3,640   29,734   10,124   S/L 31.5   2004(A) 
Buffalo, NY (Delaware)
  3,568   29,001   0   3,620   29,555   33,175   4,304   28,872   715   S/L 31.5   2004(A) 
Cheektowaga, NY (Thruway)
  15,471   25,600   0   15,471   26,888   42,359   4,450   37,910   4,060   S/L 31.5   2004(A) 
Walker, MI (Alpine Ave)
  1,454   9,284   0   1,454   11,892   13,346   2,346   10,999   0   S/L 31.5   2004(A) 
Toledo, OH
  1,316   3,961   0   1,316   3,961   5,277   613   4,664   0   S/L 31.5   2004(A) 
Amherst, NY
  4,054   11,995   0   4,054   12,053   16,107   1,808   14,299   4,204   S/L 31.5   2004(A) 
New Hartford, NY
  1,279   13,685   0   1,279   13,743   15,022   2,079   12,943   0   S/L 31.5   2004(A) 
Tonawanda, NY (Sher/Delaware)
  5,090   14,874   0   5,090   14,942   20,032   2,255   17,777   0   S/L 31.5   2004(A) 
Mays Landing, NJ (Hamilton)
  36,224   56,949   0   36,224   59,240   95,464   8,788   86,676   11,349   S/L 31.5   2004(A) 
Gates, NY
  9,369   40,672   0   9,369   41,558   50,927   6,233   44,694   23,783   S/L 31.5   2004(A) 
Rome, NY (Freedom)
  4,565   5,078   0   4,565   9,239   13,804   1,189   12,615   3,571   S/L 31.5   2004(A) 
Englewood, FL
  2,172   2,983   0   2,172   3,195   5,367   424   4,944   1,352   S/L 31.5   2004(A) 

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Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Hamburg, NY (Milestrip)
  2,527   14,711   0   2,527   14,872   17,399   2,382   15,017   0   S/L 31.5   2004(A) 
Mooresville, NC
  14,369   43,688   0   14,369   44,410   58,779   6,125   52,655   22,869   S/L 31.5   2004(A) 
Amherst, NY (Sheridan/Harlem)
  2,620   2,554   0   2,620   2,848   5,468   442   5,027   0   S/L 31.5   2004(A) 
Indian Trail, NC
  3,172   7,075   0   3,172   7,368   10,540   1,153   9,386   6,634   S/L 31.5   2004(A) 
Dewitt, NY
  1,140   6,756   0   881   5,677   6,558   844   5,714   0   S/L 31.5   2004(A) 
Chili, NY
  2,143   8,109   0   2,143   8,109   10,252   1,235   9,017   0   S/L 31.5   2004(A) 
Horseheads, NY
  659   2,426   0   4,682   19,484   24,166   273   23,893   30,618   S/L 31.5   2007(A) 
Ashtabula, OH
  1,444   9,912   0   1,444   9,916   11,360   1,473   9,888   6,608   S/L 31.5   2004(A) 
Niskayuna, NY
  20,297   51,155   0   20,297   51,916   72,213   8,128   64,085   20,804   S/L 31.5   2004(A) 
Dansville, NY
  2,806   4,905   0   2,806   5,041   7,847   768   7,079   0   S/L 31.5   2004(A) 
Dewitt, NY (Dewitt Commons)
  9,738   26,351   0   9,738   32,044   41,782   6,370   35,412   0   S/L 31.5   2004(A) 
Victor, NY
  2,374   6,433   0   2,374   6,517   8,891   955   7,936   6,297   S/L 31.5   2004(A) 
Wilmington, NC
  4,785   16,852   1,183   4,287   34,528   38,815   15,396   23,418   24,500   S/L 31.5   1989(C) 
Berlin, VT
  859   10,948   24   866   15,466   16,332   8,932   7,401   0   S/L 30.0   1986(C) 
Brainerd, MN
  703   9,104   272   1,182   15,955   17,137   7,388   9,749   0   S/L 31.5   1991(A) 
Spring Hill, FL
  1,084   4,816   266   2,096   11,051   13,147   5,234   7,913   4,521   S/L 30.0   1988(C) 
Tiffin, OH
  432   5,908   435   432   7,907   8,339   5,767   2,572   0   S/L 30.0   1980(C) 
Broomfield, CO (Flatiron Gard)
  23,681   31,809   0   13,707   42,731   56,438   7,116   49,323   0   S/L 31.5   2003(A) 
Denver, CO (Centennial)
  7,833   35,550   0   8,082   56,549   64,631   18,087   46,544   36,573   S/L 31.5   1997(C) 
Dickinson, ND
  57   6,864   355   51   7,799   7,850   7,596   254   0   S/L 30.0   1978(C) 
New Bern, NC
  780   8,204   72   441   5,285   5,726   2,717   3,008   0   S/L 31.5   1989(C) 
Bayamon, PR (Plaza Del Sol)
  132,074   152,441   0   132,759   155,203   287,962   19,400   268,563   0   S/L 31.5   2005(A) 
Carolina, PR (Plaza Escorial)
  28,522   76,947   0   28,601   77,432   106,033   9,836   96,197   57,500   S/L 31.5   2005(A) 
Humacao, PR (Palma Real)
  16,386   74,059   0   16,386   75,214   91,600   9,513   82,088   0   S/L 31.5   2005(A) 
Isabela, PR (Plaza Isabela)
  8,175   41,094   0   8,175   42,507   50,682   5,373   45,308   0   S/L 31.5   2005(A) 
San German, PR (Camino Real)
  3,215   24   0   3,232   24   3,256   14   3,243   0   S/L 31.5   2005(A) 
Cayey, PR (Plaza Cayey)
  19,214   25,584   0   18,629   26,235   44,864   3,390   41,474   0   S/L 31.5   2005(A) 
Bayamon, PR (Rio Hondo)
  91,645   98,007   0   91,898   101,795   193,693   12,531   181,162   109,500   S/L 31.5   2005(A) 
San Juan, PR (Senorial Plaza)
  10,338   23,285   0   10,238   26,922   37,160   3,041   34,119   0   S/L 31.5   2005(A) 
Bayamon, PR (Rexville Plaza)
  4,294   11,987   0   4,294   12,237   16,531   1,586   14,945   0   S/L 31.5   2005(A) 
Arecibo, PR (Atlantico)
  7,965   29,898   0   8,094   30,890   38,984   3,945   35,039   0   S/L 31.5   2005(A) 
Hatillo, PR (Plaza Del Norte)
  101,219   105,465   0   101,219   109,884   211,103   13,617   197,486   0   S/L 31.5   2005(A) 
Vega Baja, PR (Plaza Vega Baja)
  7,076   18,684   0   7,076   18,728   25,804   2,410   23,393   0   S/L 31.5   2005(A) 

F-67

Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Guyama, PR (Plaza Wal-Mart)
  1,960   18,721   0   1,960   18,922   20,882   2,412   18,470   0   S/L 31.5   2005(A) 
Fajardo, PR (Plaza Fajardo)
  4,376   41,199   0   4,376   41,502   45,878   5,254   40,624   0   S/L 31.5   2005(A) 
San German, PR (Del Oeste)
  6,470   20,751   0   6,470   21,117   27,587   2,714   24,874   0   S/L 31.5   2005(A) 
Princeton, NJ
  7,121   29,783   0   7,121   36,049   43,170   11,600   31,570   0   S/L 31.5   1998(A) 
Princeton, NJ (Pavilion)
  6,327   44,466   0   7,343   55,589   62,932   12,651   50,280   0   S/L 31.5   2000(C) 
Phoenix, AZ
  15,352   22,813   1,601   15,352   26,545   41,897   9,002   32,894   30,000   S/L 31.5   2000(C) 
Wichita, KS ( Eastgate)
  5,058   11,362   0   5,222   12,549   17,771   2,956   14,814   0   S/L 31.5   2002(A) 
Russellville, AR
  624   13,391   0   624   14,832   15,456   6,373   9,083   0   S/L 31.5   1994(A) 
N. Little Rock, AR
  907   17,160   0   907   19,228   20,135   6,968   13,167   0   S/L 31.5   1994(A) 
Ottumwa, IA
  338   8,564   103   317   16,545   16,862   7,484   9,378   0   S/L 31.5   1990(C) 
Washington, NC
  991   3,118   34   878   4,476   5,354   2,268   3,085   0   S/L 31.5   1990(C) 
Leawood, KS
  13,002   69,086   0   13,527   79,210   92,737   14,489   78,248   46,435   S/L 31.5   1998(A) 
Littleton, CO
  12,249   50,709   0   12,621   53,334   65,955   10,747   55,209   42,200   S/L 31.5   2002(C) 
Durham, NC
  2,210   11,671   278   2,210   13,776   15,986   7,838   8,148   0   S/L 31.5   1990(C) 
San Antonio, TX (N. Bandera)
  3,475   37,327   0   3,475   37,981   41,456   7,860   33,597   0   S/L 31.5   2002(A) 
Crystal River, FL
  1,217   5,796   365   1,219   9,827   11,046   4,948   6,098   0   S/L 31.5   1986(C) 
Dublin, OH (Perimeter Center)
  3,609   11,546   0   3,609   11,708   15,317   4,064   11,253   0   S/L 31.5   1998(A) 
Hamilton, OH
  495   1,618   0   495   1,618   2,113   552   1,561   0   S/L 31.5   1998(A) 
Barboursville, WV
  431   1,417   2   0   1,959   1,959   647   1,312   0   S/L 31.5   1998(A) 
Columbus, OH (Easton Market)
  11,087   44,494   0   12,243   49,112   61,355   15,936   45,418   0   S/L 31.5   1998(A) 
Columbus, OH (Dublin Village))
  6,478   29,792   0   6,478   29,681   36,159   29,654   6,505   0   S/L 31.5   2005(A) 
Denver, CO (Tamarac Square Mall)
  2,990   12,252   0   2,987   13,957   16,944   4,195   12,749   0   S/L 31.5   2001(A) 
Daytona Beach, FL (Volusia Point)
  3,838   4,485   0   3,834   5,059   8,893   1,291   7,602   0   S/L 31.5   2001(A) 
Twinsburg, OH (Heritage Business)
  254   1,623   0   254   1,774   2,028   427   1,601   0   S/L 31.5   2001(A) 
Silver Springs, MD (Tech Center29-1)
  7,484   20,980   0   7,476   25,183   32,659   6,450   26,208   6,173   S/L 31.5   2001(A) 
San Antonio, TX (Center)
  1,232   7,881   0   1,014   7,256   8,270   304   7,966   0   S/L 31.5   2007(C) 
San Antonio, TX (Lifestyle)
  1,613   10,791   0   5,427   54,036   59,463   985   58,478   0   S/L 31.5   2007(C) 
McHenry, IL
  332   1,302   0   1,884   7,021   8,905   76   8,829   0   S/L 31.5   2006(C) 
San Antonio, TX (Terrell)
  4,980   11,880   0   4,980   11,880   16,860   377   16,484   12,774   S/L 31.5   2007(A) 
Macon, GA
  2,940   5,192   0   2,940   5,447   8,387   314   8,073   0   S/L 31.5   2007(A) 
Snellville, GA (Commons)
  10,185   51,815   0   10,318   52,499   62,817   3,117   59,700   0   S/L 31.5   2007(A) 
Union, NJ
  7,659   15,689   0   7,650   15,670   23,320   936   22,385   0   S/L 31.5   2007(A) 

F-68

Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Spartanburg, SC (Northpoint)
  1,015   8,992   0   1,015   8,992   10,007   553   9,455   0   S/L 31.5   2007(A) 
Taylors, SC (Hampton)
  1,732   4,506   0   1,732   4,506   6,238   272   5,966   0   S/L 31.5   2007(A) 
Dothan, AL (Shops)
  2,065   20,972   0   2,065   20,974   23,039   1,249   21,789   11,409   S/L 31.5   2007(A) 
Bradenton, FL (Cortez)
  10,766   31,203   0   10,766   31,262   42,028   1,911   40,116   12,198   S/L 31.5   2007(A) 
Clearwater, FL
  5,579   15,855   0   5,579   16,259   21,838   1,018   20,819   0   S/L 31.5   2007(A) 
New Tampa, FL
  1,707   3,338   0   1,707   3,343   5,050   208   4,841   0   S/L 31.5   2007(A) 
Tequesta, FL
  2,108   7,400   0   2,108   8,271   10,379   561   9,818   5,200   S/L 31.5   2007(A) 
Kennesaw, GA (Town)
  6,175   9,028   0   6,175   9,029   15,204   533   14,670   0   S/L 31.5   2007(A) 
Lawrenceville, GA (Springfield)
  3,049   10,890   0   3,049   10,892   13,941   649   13,292   0   S/L 31.5   2007(A) 
Roswell, GA (Village)
  6,566   15,005   0   6,566   15,057   21,623   892   20,731   0   S/L 31.5   2007(A) 
Hagerstown, MD
  2,440   9,697   0   2,440   10,209   12,649   683   11,966   6,770   S/L 31.5   2007(A) 
Greensboro, NC (Golden)
  5,012   11,162   0   5,012   11,163   16,175   679   15,496   0   S/L 31.5   2007(A) 
Greensboro, NC (Wendover)
  3,153   9,455   0   3,153   9,536   12,689   565   12,124   5,450   S/L 31.5   2007(A) 
Brick, NJ
  4,261   21,479   0   4,261   21,554   25,815   1,292   24,522   10,300   S/L 31.5   2007(A) 
East Hanover, NJ (Plaza)
  3,847   23,798   0   3,847   23,998   27,845   1,443   26,401   9,280   S/L 31.5   2007(A) 
East Hanover, NJ (Sony)
  6,861   11,165   0   6,861   11,165   18,026   671   17,354   6,445   S/L 31.5   2007(A) 
Camp Hill, PA
  1,631   8,402   0   1,631   8,402   10,033   506   9,527   0   S/L 31.5   2007(A) 
Middletown, RI
  3,804   16,805   0   3,804   16,805   20,609   1,011   19,599   10,000   S/L 31.5   2007(A) 
Conway, SC
  1,217   7,038   0   1,217   7,045   8,262   459   7,804   0   S/L 31.5   2007(A) 
Lexington, SC
  1,795   9,933   0   1,795   9,933   11,728   591   11,138   0   S/L 31.5   2007(A) 
Newport News, VA (Denbigh)
  10,064   21,272   0   10,064   21,489   31,553   1,331   30,222   11,457   S/L 31.5   2007(A) 
Richmond, VA (Downtown)
  12,002   34,736   0   11,990   34,740   46,730   2,067   44,663   18,480   S/L 31.5   2007(A) 
Springfield, VA (Loisdale)
  12,627   30,572   0   12,627   30,572   43,199   1,803   41,396   0   S/L 31.5   2007(A) 
Springfield, VA (Spring Mall)
  4,389   9,466   0   4,389   10,145   14,534   623   13,911   0   S/L 31.5   2007(A) 
Sterling, VA
  8,426   18,651   0   8,426   18,651   27,077   1,109   25,968   0   S/L 31.5   2007(A) 
Windsor Court, CT
  6,090   11,745   0   6,090   11,746   17,836   701   17,134   8,015   S/L 31.5   2007(A) 
Ocala, FL
  2,877   9,407   0   2,877   9,408   12,285   566   11,719   0   S/L 31.5   2007(A) 
Plant City, FL
  3,687   9,849   0   3,687   9,858   13,545   586   12,959   5,900   S/L 31.5   2007(A) 
Brandon, FL
  3,571   12,190   0   3,571   12,190   15,761   718   15,043   0   S/L 31.5   2007(A) 
Atlanta, GA (Abernathy)
  11,634   31,341   0   11,634   31,358   42,992   1,841   41,151   13,392   S/L 31.5   2007(A) 
Norcross, GA
  3,007   8,489   0   3,007   8,507   11,514   508   11,006   0   S/L 31.5   2007(A) 
Bowie, MD
  5,739   14,301   0   5,739   14,307   20,046   860   19,187   8,424   S/L 31.5   2007(A) 
Ashville, NC (Oakley)
  2,651   8,908   0   2,651   8,924   11,575   597   10,978   5,175   S/L 31.5   2007(A) 

F-69

Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Cary, NC (Mill Pond)
  6,913   17,301   0   6,913   17,334   24,247   1,034   23,213   8,500   S/L 31.5   2007(A) 
Charlotte, NC (Camfield)
  2,842   9,807   0   2,842   9,843   12,685   591   12,093   5,150   S/L 31.5   2007(A) 
Cornelius, NC
  4,382   15,184   0   4,382   15,277   19,659   900   18,759   0   S/L 31.5   2007(A) 
Greensboro, NC (Capital)
  3,070   13,386   0   3,070   13,463   16,533   818   15,715   6,700   S/L 31.5   2007(A) 
Raleigh, NC (Capital)
  2,728   10,665   0   2,728   10,665   13,393   640   12,753   5,478   S/L 31.5   2007(A) 
Raleigh, NC (Wakefield)
  3,345   11,482   0   3,345   11,496   14,841   695   14,147   0   S/L 31.5   2007(A) 
Wilmington, NC (Oleander)
  2,270   4,812   0   2,270   4,963   7,233   324   6,909   0   S/L 31.5   2007(A) 
Wilson, NC
  1,598   8,160   0   1,598   8,240   9,838   499   9,338   0   S/L 31.5   2007(A) 
Morgantown, WV
  4,645   10,341   0   4,645   10,341   14,986   673   14,314   0   S/L 31.5   2007(A) 
Greenwood, SC
  607   4,094   0   607   4,094   4,701   252   4,450   0   S/L 31.5   2007(A) 
Edgewater, NJ
  7,714   30,473   0   7,714   30,585   38,299   1,805   36,495   14,000   S/L 31.5   2007(A) 
Cullman, AL
  2,542   7,651   0   2,542   7,651   10,193   469   9,724   0   S/L 31.5   2007(A) 
Dothan, AL
  1,293   6,005   0   1,293   6,005   7,298   366   6,932   0   S/L 31.5   2007(A) 
Culver City, CA
  4,239   4,824   0   4,239   4,824   9,063   290   8,773   0   S/L 31.5   2007(A) 
Highland Ranch, CO
  1,380   4,739   0   1,380   4,739   6,119   288   5,831   0   S/L 31.5   2007(A) 
Manchester, CT
  4,334   10,428   0   4,334   9,408   13,742   638   13,104   0   S/L 31.5   2007(A) 
Dania Beach, FL
  9,593   17,686   0   9,593   17,686   27,279   1,075   26,203   0   S/L 31.5   2007(A) 
Plantation, FL (Vision)
  1,032   580   0   1,032   580   1,612   35   1,577   0   S/L 31.5   2007(A) 
Vero Beach, FL
  2,653   4,667   0   2,653   4,667   7,320   284   7,035   0   S/L 31.5   2007(A) 
Duluth, GA (Sofa)
  815   2,692   0   815   2,692   3,507   165   3,342   0   S/L 31.5   2007(A) 
Gainesville, GA
  1,073   1,586   0   1,073   1,586   2,659   95   2,564   0   S/L 31.5   2007(A) 
Lawrenceville, GA (Eckerd)
  1,457   1,057   0   1,457   1,057   2,514   64   2,450   0   S/L 31.5   2007(A) 
Macon, GA (K-Mart)
  1,397   1,142   0   1,397   1,142   2,539   67   2,473   0   S/L 31.5   2007(A) 
Marietta, GA (Eckerd)
  1,622   1,050   0   1,622   1,050   2,672   64   2,609   0   S/L 31.5   2007(A) 
Rome, GA
  1,523   4,065   0   1,523   4,065   5,588   249   5,339   0   S/L 31.5   2007(A) 
Snellville, GA (Eckerd)
  1,303   1,494   0   1,303   1,494   2,797   90   2,708   0   S/L 31.5   2007(A) 
Sylvania, GA
  431   3,774   0   431   3,774   4,205   235   3,970   0   S/L 31.5   2007(A) 
Warner Robbins, GA (Lowe’s)
  3,667   10,940   0   3,667   10,940   14,607   672   13,934   0   S/L 31.5   2007(A) 
Rockford, IL
  1,107   3,165   0   1,107   3,165   4,272   191   4,081   3,223   S/L 31.5   2007(A) 
Covington, LA
  1,054   1,394   0   1,054   1,423   2,477   92   2,386   0   S/L 31.5   2007(A) 
Worcester, MA
  5,395   10,938   0   5,395   10,938   16,333   656   15,677   0   S/L 31.5   2007(A) 
Dearborn Heights, MI
  2,463   2,946   0   2,463   2,946   5,409   178   5,232   3,550   S/L 31.5   2007(A) 
Livonia, MI
  1,411   2,727   0   1,411   2,727   4,138   165   3,973   2,477   S/L 31.5   2007(A) 

F-70

Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Port Huron, MI
  1,662   3,270   0   1,662   3,270   4,932   198   4,735   0   S/L 31.5   2007(A) 
Westland, MI
  1,400   2,531   0   1,400   2,531   3,931   155   3,776   2,625   S/L 31.5   2007(A) 
Cary, NC
  2,264   4,581   0   2,264   4,581   6,845   277   6,568   0   S/L 31.5   2007(A) 
Concord, NC (Eckerd)
  885   2,119   0   885   2,119   3,004   128   2,877   0   S/L 31.5   2007(A) 
Raleigh, NC (Eckerd)
  1,249   2,127   0   1,249   2,127   3,376   128   3,248   0   S/L 31.5   2007(A) 
Winston-Salem, NC (Wal-Mart)
  7,156   15,010   0   7,156   15,010   22,166   931   21,236   0   S/L 31.5   2007(A) 
Buffalo, NY (Eckerd)
  1,229   2,428   0   1,229   2,428   3,657   146   3,511   0   S/L 31.5   2007(A) 
Cheektowaga, NY (Eckerd)
  1,740   2,417   0   1,740   2,417   4,157   145   4,013   0   S/L 31.5   2007(A) 
Dunkirk, NY
  0   1,487   0   0   1,487   1,487   91   1,396   0   S/L 31.5   2007(A) 
Amherst, NY (Eckerd)
  1,483   1,917   0   1,483   1,917   3,400   116   3,285   0   S/L 31.5   2007(A) 
Alliance, OH
  812   16,244   0   812   16,244   17,056   1,002   16,054   0   S/L 31.5   2007(A) 
Cincinnati, OH (Kroger)
  2,805   5,028   0   2,805   5,028   7,833   303   7,530   0   S/L 31.5   2007(A) 
Steubenville, OH
  3,324   10,423   0   3,324   10,423   13,747   639   13,107   0   S/L 31.5   2007(A) 
Weschester, OH
  1,449   3,916   0   1,449   3,916   5,365   244   5,121   0   S/L 31.5   2007(A) 
Oklahoma City, OK
  395   1,697   0   395   1,697   2,092   101   1,991   0   S/L 31.5   2007(A) 
Cheswick, PA
  863   2,225   0   863   2,225   3,088   134   2,954   0   S/L 31.5   2007(A) 
Connelsville, PA
  1,356   2,524   0   1,356   2,524   3,880   151   3,729   0   S/L 31.5   2007(A) 
Harborcreek, PA
  1,062   2,124   0   1,062   2,124   3,186   127   3,059   0   S/L 31.5   2007(A) 
Erie, PA (Eckerd)
  958   2,223   0   958   2,223   3,181   133   3,048   0   S/L 31.5   2007(A) 
Millcreek, PA (Eckerd)
  1,525   2,416   0   1,525   2,416   3,941   145   3,796   0   S/L 31.5   2007(A) 
Millcreek, PA (Eckerd)
  0   1,486   0   0   1,486   1,486   90   1,395   0   S/L 31.5   2007(A) 
Erie, PA (Eckerd)
  1,578   2,721   0   1,578   2,721   4,299   163   4,137   0   S/L 31.5   2007(A) 
Erie, PA (Eckerd)
  1,641   2,015   0   1,641   2,015   3,656   121   3,536   0   S/L 31.5   2007(A) 
Penn, PA
  852   2,418   0   852   2,418   3,270   145   3,124   0   S/L 31.5   2007(A) 
Monroeville, PA
  2,863   2,935   0   2,863   2,935   5,798   175   5,622   0   S/L 31.5   2007(A) 
Monroeville, PA (Eckerd)
  1,431   2,024   0   1,431   2,024   3,455   122   3,333   0   S/L 31.5   2007(A) 
New Castle, PA
  1,331   2,016   0   1,331   2,016   3,347   121   3,226   0   S/L 31.5   2007(A) 
Pittsburgh, PA
  1,771   2,523   0   1,771   2,523   4,294   151   4,143   0   S/L 31.5   2007(A) 
Plum Borough, PA
  1,671   2,424   0   1,671   2,424   4,095   145   3,950   0   S/L 31.5   2007(A) 
Taega Cay, SC
  1,387   2,451   0   1,387   2,451   3,838   148   3,690   0   S/L 31.5   2007(A) 
Gaffney, SC
  1,189   2,363   0   1,189   2,363   3,552   144   3,408   0   S/L 31.5   2007(A) 
Greenville, SC (Eckerd)
  1,452   1,909   0   1,452   1,909   3,361   115   3,246   0   S/L 31.5   2007(A) 
Greenville, SC (Wal-Mart)
  5,659   14,411   0   5,659   14,411   20,070   897   19,174   0   S/L 31.5   2007(A) 

F-71

Table of Contents

 
                                             
Developers Diversified Realty Corporation
                        
Real Estate and Accumulated Depreciation — (continued)
                        
December 31, 2008
              Total
        Date
(In thousands)
              Cost,
        of
  Initial Cost  Total Cost (B)     Net
     Depreciable
  Construction
     Buildings
        Buildings
        of
     Lives
  (C)
     &
        &
     Accumulated
  Accumulated
     (Years)
  Acquisition
  Land  Improvements  Improvements  Land  Improvements  Total  Depreciation  Depreciation  Encumbrances  (1)  (A)
 
Mt. Pleasant, SC (Bi-Lo)
  2,420   7,979   0   2,420   7,979   10,399   492   9,907   0   S/L 31.5   2007(A) 
Piedmont, SC
  589   1,687   0   589   1,687   2,276   102   2,174   0   S/L 31.5   2007(A) 
Spartanburg, SC (Blackstock)
  1,223   2,128   0   1,223   2,128   3,351   128   3,222   0   S/L 31.5   2007(A) 
Spartanburg, SC (Eckerd)
  1,255   2,226   0   1,255   2,226   3,481   134   3,347   0   S/L 31.5   2007(A) 
Woodruff, SC
  1,145   2,353   0   1,145   2,353   3,498   143   3,355   0   S/L 31.5   2007(A) 
Baytown, TX (Lowe’s)
  1,568   10,383   0   1,568   10,383   11,951   633   11,318   0   S/L 31.5   2007(A) 
Ft. Worth, TX (CVS )
  860   1,913   0   860   1,913   2,773   114   2,659   0   S/L 31.5   2007(A) 
Ft. Worth , TX (CVS)
  701   1,276   0   701   1,276   1,977   77   1,901   0   S/L 31.5   2007(A) 
Garland, TX
  1,567   73   0   1,567   73   1,640   4   1,635   0   S/L 31.5   2007(A) 
Grand Prairie, TX
  2,892   3,226   0   2,892   3,226   6,118   205   5,913   0   S/L 31.5   2007(A) 
Houston, TX
  4,380   8,729   0   4,380   8,729   13,109   543   12,567   0   S/L 31.5   2007(A) 
Richland Hills, TX
  1,094   1,605   0   1,094   1,605   2,699   97   2,603   0   S/L 31.5   2007(A) 
Richardson, TX (CVS)
  1,045   1,594   0   1,045   1,594   2,639   96   2,543   0   S/L 31.5   2007(A) 
Rowlett, TX
  1,241   211   0   1,241   211   1,452   12   1,440   0   S/L 31.5   2007(A) 
Tyler, TX
  316   1,384   0   316   1,219   1,535   83   1,452   0   S/L 31.5   2007(A) 
Olympia, WA
  2,946   3,094   0   2,946   3,094   6,040   190   5,850   0   S/L 31.5   2007(A) 
Oshkosh, WI
  1,250   3,176   0   1,250   3,176   4,426   192   4,234   2,817   S/L 31.5   2007(A) 
Weirton, WV
  694   2,109   0   694   2,109   2,803   127   2,676   0   S/L 31.5   2007(A) 
Lakeland, FL (Highlands)
  2,800   3,148   0   2,800   3,442   6,242   298   5,944   0   S/L 31.5   2007(A) 
Plantation, FL (Fountains)
  20,697   36,751   0   20,697   39,305   60,002   2,469   57,533   0   S/L 31.5   2007(A) 
Evansville, IN (East)
  8,964   18,764   0   8,964   18,800   27,764   1,166   26,598   0   S/L 31.5   2007(A) 
Portfolio Balance (DDR)
  492,046   523,078   0   492,055   523,085   1,015,140   26,650   988,483   387,374(2)  S/L 31.5     
                                           
  $2,525,663  $5,873,157  $12,403  $2,543,856(3) $6,562,779(4) $9,106,635  $1,208,903  $7,897,732  $1,565,989         
                                           
 
 
(1)S/L refers to straight-line depreciation.
 
(2)Includes $258.5 million of mortgage debt which encumbers 37 Mervyns sites.
 
(3)Includes $469.9 million of land under development at December 31, 2008.
 
(4)Includes $409.6 million of construction in progress at December 31, 2008.
 
(B)The Aggregate Cost for Federal Income Tax purposes was approximately $9.1 billion at December 31, 2008.

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Table of Contents

 
The changes in Total Real Estate Assets for the three years ended December 31, 2008 are as follows:
 
             
  2008  2007  2006 
 
Balance, beginning of year
 $8,978,875  $7,442,135  $7,029,337 
Acquisitions and transfers from joint ventures
  10,994   3,048,672   370,218 
Developments, improvements and expansions
  215,045   283,806   236,147 
Changes in land under development and construction in progress
  214,622   211,432   104,808 
Real estate held for sale
  —   (5,863)  (8,558)
Sales and transfers to joint ventures
  (312,901)  (2,001,307)  (289,817)
             
Balance, end of year
 $9,106,635  $8,978,875  $7,442,135 
             
 
The changes in Accumulated Depreciation and Amortization for the three years ended December 31, 2008 are as follows:
 
             
  2008  2007  2006 
 
Balance, beginning of year
 $1,024,048  $861,266  $692,823 
Depreciation for year
  246,374   224,375   193,527 
Real estate held for sale
  —   (67)  (3,326)
Sales
  (61,519)  (61,526)  (21,758)
             
Balance, end of year
 $1,208,903  $1,024,048  $861,266 
             


F-73

Table of Contents

 
Schedule IV — Mortgage Loans on Real Estate
December 31, 2008
(Dollars amounts in thousands)
 
                         
                  Principal
 
                  Amount of
 
                  Loans
 
                  subject to
 
     Final
 Periodic
          delinquent
 
     Maturity
 Payment
 Prior
  Face Amount of
  Carrying Amount of
  principal
 
Description
 Interest Rate  Date Terms Liens  Mortgages  Mortgages  or interest 
 
MEZZANINE LOANS

MULTI-FAMILY
                        
Multifamily Development/Mesa, AZ
  LIBOR+6.0%,
Floor 11%		 Mar-11 Interest Monthly, principal at maturity  —   5,211   5,211   — 
Multifamily Development/Dallas, TX
  LIBOR+6.5%,
Floor 11.5%		 Apr-11 Interest Monthly, principal at maturity  —   2,822   2,822   — 
Multifamily Development/Dallas, TX
  LIBOR+8.0%,
Floor 12%		 Jun-11 Interest Monthly, principal at maturity  —   7,624   7,624   — 
RETAIL
                        
Retail Development/ BonitaSprings, FL
  LIBOR+6.0%,
Floor 11%		 May-11 Interest Monthly, principal at maturity  —   10,806   5,406(1)  — 
Retail Development/ Bloomfield Hills, MI
  LIBOR+7.0%,
Floor 12%		 Jul-11 Interest Monthly, principal at maturity  —   58,089   58,089   — 
Retail Development/ Orlando, FL
  Prime+0.5%,
Floor 7%		 Oct-08 Interest Monthly, principal at maturity  —   18,988   18,988   18,988 
MIXED USE
                        
Mixed Use Development/ Washington DC
  LIBOR+7.0%,
Floor 11%		 Dec-10 Interest Monthly, principal at maturity  —   12,600   12,600   — 
Mixed Use Development/ East Lansing, MI
  LIBOR+10.0%,
Floor 14%		 Sep-11 Interest Monthly, principal at maturity  —   4,679   4,679   — 
                         
              $120,819  $115,419     
                         
 
(1) Includes a $5.4 million loan loss reserve.
 


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Table of Contents

         
  Year Ended
  Year Ended
 
  December 31,
  December 31,
 
  2008  2007 
 
Balance at beginning of period
 $—  $— 
Additions during period:
        
New mortgage loans
  120,819   — 
Deductions during period:
        
Provision for loan loss reserve
  (5,400)  — 
Collections of principal
  —   — 
         
Balance at close of period
 $115,419  $— 
         

F-75

Table of Contents

SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
DEVELOPERS DIVERSIFIED REALTY CORPORATION
 
  By: 
/s/  Scott A. Wolstein
Scott A. Wolstein, Chairman and Chief Executive Officer
 
Date: February 27, 2009
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on the 27th day February, 2009.
 
     
   
/s/  Scott A. Wolstein

Scott A. Wolstein		 
Chairman, Chief Executive Officer and Director (Principal Executive Officer)
   
/s/  William H. Schafer

William H. Schafer		 
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
   
/s/  Christa A. Vesy

Christa A. Vesy		 
Senior Vice President and Chief Accounting Officer
   
/s/  Dean S. Adler

Dean S. Adler		 
Director
   
/s/  Terrance R. Ahern

Terrance R. Ahern		 
Director
   
    

Robert H. Gidel		 
Director
   
/s/  Victor B. MacFarlane

Victor B. MacFarlane		 
Director
   
/s/  Craig Macnab

Craig Macnab		 
Director
   
/s/  Scott D. Roulston

Scott D. Roulston		 
Director
   
/s/  Barry A. Sholem

Barry A. Sholem		 
Director
   
/s/  William B. Summers, Jr.

William B. Summers, Jr.		 
Director
     
     


F-76

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