Article Excerpt:
TWST: What is Developers Diversified Realty Corporation?Mr. Jacobstein: Developers Diversified Realty is the leading owner, developer and manager of market-dominant community centers in the United States. We specialize in open-air shopping centers of a regional nature. Although the company went public in 1993, we are celebrating the 40th anniversary of the company's inception in 1965. The company was founded by Bert L. Wolstein, whose son Scott is Chairman and Chief Executive Officer. Scott was instrumental in the company's IPO in 1993 and has been CEO since then. We have over 500 operating and development retail assets aggregating 113 million square feet in 44 states, plus Puerto Rico. The company's total market capitalization is in excess of $10 billion and its franchise value, which reflects the total value of the assets we own and manage through joint ventures, exceeds $13 billion.
TWST: What are the differences today as you look at the different
property types and segments within the REIT industry? What recommends
your strategy and your types of properties versus the alternatives?
Mr. Jacobstein: We are in the sweet spot of retail real estate. We are
the first national REIT to concentrate its portfolio in market-dominant
community centers that emphasize value and convenience. Our leading and
anchor tenants are Wal-Mart, Target, Home Depot, Lowe's, Kohl's and a
whole series of midsize boxes representing all of the major retail
category killers. This format has proved to be the most attractive to
consumers, allowing them to drive to the front of the store, park and
easily walk into the store. Moreover, our tenants generally present a
value concept to shoppers, which is compelling even to consumers with
very high incomes. We believe that this type of center, which we
started developing in the early 1990s and have really concentrated on
since then, is the most successful retail format. That is not to say
that high quality, Class-A enclosed malls, many of which are owned by
REITS, are not going to continue to have success ' they will. There is a
certain shopper who will want to shop in that type of retail
environment, but we believe that we are in the sweet spot and see no
reason why that won't continue well into the future. Our portfolio
really reflects three primary long-term consumer trends that we have
seen demonstrated over the last few years and that we believe will
continue to dominate the retail landscape for many years to come. The
first of those is the trend toward open-air shopping centers versus
enclosed malls. The second is the trend toward value retailers as
opposed to department stores, and the third is the trend towards
supercenters and wholesale clubs selling grocery type items versus
traditional groceries.
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