the bears in retreat maybe, page-3

http://online.wsj.com/article/BT-CO-20090423-724364.html

DOW JONES NEWSWIRES

Developers Diversified Realty Corp.'s (DDR) first-quarter net income more than doubled as the debt-laden shopping center giant reported a hefty gain on the repurchase of senior notes.

Retail real estate investment trusts have been hit especially hard amid the recession. Slowing consumer spending means customers aren't buying from their tenants, which then hampers tenants ability to remain in business or pay their rent. Developers Diversified has sold assets and stock and slashed its capital spending to boost its liquidity, along with outlining plans to sell stakes in properties to pay down debt.

Developers Diversified reported net income of $84.8 million, or 59 cents a share, up from $40.2 million, or 25 cents a share, a year earlier.

Funds from operations, a key measure of REIT profitability, rose to $1.08 a share from 80 cents. FFO excluding items was 66 cents.

Revenue dropped to $219.8 million from $236.1 million.

Excluding items, analysts polled by Thomson Reuters expected earnings of 3 cents, FFO of 64 cents and revenue of $213 million.

During the quarter, the nation's largest shopping center owner executed 124 new leases and 227 renewals, totaling 1.3 million square feet. Rental rates decreased 0.6% on new leases, rose 0.9% on renewals and climbed 0.6% overall. Annualized base rent per occupied square foot, excluding Brazil, grew to $12.45 from $12.38.

Of the core portfolio, 90.7% was leased as of March 31, down from 95.6% a year earlier.

Developers Diversified said it sold seven properties during the first quarter, representing 0.7 million square feet.

Ratings agencies have become increasingly pessimistic about the industry's ability to handle large near-term debt maturities, heavy borrowings under revolving credit facilities, underfunded development commitments and significant lease expirations.

Last week, rival General Growth Properties Inc. (GGP) sought bankruptcy protection in one of the largest real-estate failures in U.S. history, as it struggled to juggle $27 billion in debt it held in past acquisition sprees.

Shares closed at $3.50 in Wednesday's regular session, up 67 cents, or 23%. The company's stock has lost over 90% of its value from September.

-By John Kell, Dow Jones Newswires, 201-938-5285, [email protected]


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