Slide 1: DDR Corp. 2Q17 Conference Call
DDR CORP. 2Q17 CONFERENCE CALL
Slide 2: Forward-looking statements
DDR 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. Although the Company bel
Slide 3: Agenda
2Q17 SUMMARY + 2Q17 RESULTS COMMENTARY & LEASING UPDATE 4 + FIVE-MONTH PROGRESS REPORT 6 + BALANCE SHEET & GUIDANCE UPDATE 10 + PORTFOLIO REVIEW CONCLUSIONS 13 3
Slide 4: 2Q17 Results Summary
2Q17 RESULTS SUMMARY $0.06 $ 2Q17 EPS 0.302Q17 OPERATING FFO/SH -0.1% SAME STORE NOI (PRO-RATA, INCLUDING PR) 0.0% (Pro-Rata, excluding PR) BLENDED NEW AND 93.7%LEASED 6.0% RENEWAL LEASING SPREAD 4 2Q17 RESULTS COMMENTARY
Slide 5: 2Q17 Results Summary: Leasing Update
2Q17 RESULTS SUMMARY LEASING UPDATE • 410 KSF NEW LEASES IN 2Q, 1Q 2Q Change WELL ABOVE AVERAGE VOLUME Leased 5 8 3 • 10% NEW LEASE SPREADS / LOI 2 1 -1 Negotiating 6 4 -2 6% NEW/RENEWAL SPREADS 13 13 • ELEVATED CAPEX ASSOCIATED WITH LEASING VACANT Leased 2 3 1 LOI 0 4 4 ANCHORS Negotiating 9 4 -5 1
Slide 6: Five-Month Progress Report
FIVE-MONTH PROGRESS REPORT • MONTH 1: ORGANIZATIONAL STREAMLINING •Right-sized organization: 12% head count reduction, $6MM annualized G&A reduction • MONTH 2: INITIAL PORTFOLIO REVIEW & STRATEGY PLANNING •Assessed/sustained disposition pipeline; began in-depth portfolio analysis • MONTH 3: BALANCE
Slide 7: 2Q17 Transactions
2Q17 TRANSACTIONS TOTAL ASSET SALES $238MM 11 1 DISPOSITIONS ($226MM Pro-Rata) ASSETS LAND PARCEL PUERTO RICO DDRM/MANATEE $57MM 2 LOW8% $1.05B 52 $707MM DISPOSITION (U.S. Buyer) ASSETS CAP RATE RECAPITALIZATION ASSETS MORTGAGE DEBT 7 2Q17 RESULTS COMMENTARY
Slide 8: Balance Sheet Update
BALANCE SHEET UPDATE • MATURITY EXTENSION AND DELEVERAGING ARE ON DUAL TRACK PROCESS • AVERAGE DEBT MATURITY NOW IN-LINE WITH PEERS • SIGNIFICANTLY REDUCED EXPOSURE TO SECURED DEBT 4Q16 MATURITIES ($MM) PRO FORMA MATURITIES ($MM) 5.0% $1,200 (%) $1,000 MATURITIES THROUGH DDR YE 2016 RATE 4.5% FOCUS
Slide 9: 2017 Guidance and Leverage Outlook
2017 GUIDANCE AND LEVERAGE OUTLOOK REITERATING PRIOR GUIDANCE SSNOI: -1.5% - 0% (Pro-rata, including PR) SSNOI: -1.0% - +.5% (Pro-rata, excluding PR) Leased Rate: 93% - 93.5% at YE 2017 G&A Expense: $72 - 75MM Fees: $30 - 33MM Interest Income: $26 - 29MM LEVERAGE OUTLOOK Target: 6X net Debt/EBITDA (
Slide 10: Portfolio Review
PORTFOLIO REVIEW 10
Slide 11: Asset Review Framework
ASSET REVIEW FRAMEWORK IS... IS NOT LOCATION-SPECIFIC GENERAL MSA RANKING SITE-SPECIFIC PROPERTY AGGREGATE ABR RENT ROLL-SPECIFIC SPECIFIC TO RETAIL FORMAT Solving for real estate where tenants will renew their leases at positive rent spreads 11
Slide 12: Quantitative Factors
QUANTITATIVE FACTORS FACTORS THAT DRIVE LONG-TERM DESIRABILITY CONSUMER Spending Power 1 RENT Mark-to-Market 2 DEMAND 3 Trip Generation 4 SF USAGE Value Proposition 12
Slide 13: Qualitative Factors
QUALITATIVE FACTORS TRADITIONAL SITE ANALYSIS INTERSECTION 5 Convenience VISIBILITY 6 Eyeballs 7 LAYOUT Cross-Shopping 8 DRAW Tenant Mix 13
Slide 14: Asset Review Framework
ASSET REVIEW FRAMEWORK CONSUMER INTERSECTION Spending Power 1 5 Convenience RENT VISIBILITY Mark-to-Market 2 6 Eyeballs OPPORTUNITY DEMAND 3 7 LAYOUT Trip Generation Cross-Shopping 4 8 SF USAGE DRAW Value Proposition Tenant Mix 14
Slide 15: Portfolio Opportunities
PORTFOLIO OPPORTUNITIES REDEVELOPMENT // 8% NOI 3 - Densification Opportunity - BMR (Below Market Rents) 3 - Site Plan Optimization GROWTH // 26% NOI 2 - Underserved 3-Mile Ring - Re-Tenant for Higher Sales 2 - Recent Box Vacancies DURABLE // 66% NOI 1 - Ground Leases 1 - Convenience-Oriented - Domi
Slide 16: Durable: Polaris Towne Center, Columbus, Ohio
DURABLE POLARIS TOWNE CENTER COLUMBUS, OHIO • 1.7% OCR (Occupancy Cost Ratio) • Single-Digit Rent • Flat for 21 Years • (Occupancy 3.5% OCR Cost Ratio) • Low Rent • Last Option in 2019 ANCHORS: 82% GLA $13ABR Market 16 SHOPS: 18% GLA $30ABR
Slide 17: Growth: Tanasbourne Town Center, Portland, Oregon
GROWTH TANASBOURNE TOWN CENTER PORTLAND, OREGON DEMAND DRIVERS RE-TENANTING MOMENTUM ANCHORS: 80% GLA $13ABR 17 SHOPS: 20% GLA $36ABR Market
Slide 18: Redevelopment: Sandy Plains Village, Roswell, Georgia
REDEVELOPMENT SANDY PLAINS VILLAGE ROSWELL, GEORGIA STRONG DEMOGRAPHICS 3-MILE 53K $140K Population Avg. HH Income 5-MILE 150K $110K Population Avg. HH Income • Dark single-digit & paying rent low • draw Strong with entertainment Low OCR (Occupancy Cost Ratio) SHOPS LIQUIDITY • Significant expiratio