This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

DDR's CEO on the Reincarnation of His Brand and Lack of Competition in His Space

NEW YORK (TheStreet) -- The Great Recession was devastating for many companies. Investors must remember that this financial collapse was only paralleled by the Great Depression. Most REITs got hammered during the downturn, but the same cycle also saw the end of Lehman Brothers and Bear Stearns with the near collapse of Citigroup (C) and AIG (AIG). At that time, the financial markets were in utter turmoil and there was no certainty that any REIT would have access to the capital markets.

One REIT that came close to its grave was DDR Corporation (DDR - Get Report). The Beachwood, Ohio-based REIT saw shares plummet as the company was facing a massive $3.5 billion in debt payments coming due in late 2009, and the company opted to slash dividend payments. Its share price tanked from more than $67.00 to a low of around $2.13. An hour before Thursday's close, DDR was trading at $17.08, up 10 cents, or 0.59% for the day.

Since the recession, DDR has made considerable progress transforming its portfolio by pruning off a number of properties, from 658 assets in 2008 to 396 locations today. In addition, DDR has transformed its balance sheet by improving asset quality via noncore asset sales and by selecting strong credit tenants -- all improving the company's financial flexibility. As a result of these initiatives, DDR has begun to steadily increase its dividend and in January 2014, the company announced a dividend increase of 15%, from $.135 to $.155.

While attending the ReCon 2014 in Las Vegas this week, I caught up with DDR's CEO, Daniel B. Hurwitz. The veteran shopping center executive has been instrumental in transforming DDR from a once "zombie" REIT into a focused contender. Hurwitz has been with DDR since 1999, so he has witnessed first-hand, the evolutionary transformation and the reincarnation of the DDR brand.

Hurwitz says that while there is talk of construction, nothing new is getting built in his space, so demand is greatly outstripping supply. The firm has been pruning assets of low quality, having sold about $4 billion of assets over the last several years. What is driving the space now is tenant demand for high-quality, "prime power centers" -- an asset class that takes a sizable equity check to enter.

>>Read More: Anworth Mortgage, Your Greed Is Showing

>>Read More: How Will Publicis Groupe Deal With Facebook Affect Its Stock?



Brad Thomas is a contributor for The Street and he is also the editor of a monthly newsletter, The Intelligent REIT Investor.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
DDR $17.81 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs