Beachwood, Ohio – Shopping center operator DDR Corp. is commencing a multi-year proactive lease termination initiative aimed at recapturing high-quality anchor store locations across its portfolio. Through this initiative, DDR is collaborating with retailers in the books, electronics, toys, office and traditional department store categories to right-size their real estate footprints by regaining control of locations in advance of natural lease expiration.
DDR seeks to remerchandise its prime assets with market-share-winning tenants while realizing mark-to-market rental upside of 30%-40%. During the first phase of this initiative, DDR has identified 90 anchor locations, representing 3.3 million sq.-ft. of prime retail space. Of these leases, DDR has finalized terms to recapture 21 locations, representing 550,000 sq.-ft. primarily located in Boston; Cleveland; Denver; Orlando, Florida; Phoenix; Raleigh, North Carolina; and San Antonio.
"This initiative demonstrates our ability to create organic growth opportunities for our best-in-class retail partners regardless of current portfolio leased rate,” said Paul Freddo, senior executive VP of leasing and development for DDR. “Recapturing below-market leases represents an incremental growth opportunity to upgrade asset-level merchandise mix and NOI growth profiles, while simultaneously expanding redevelopment opportunities that will further enhance the quality of our portfolio.”