DDR Adds Nordstrom at Miami Asset, Boosts Project Accelerate - Analyst Blog


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DDR Corp. ( DDR ) disclosed the prospective opening of the Nordstrom Rack store of Nordstrom Inc. ( JWN ) at The Shops at Midtown Miami in Florida. The outlet is projected to open in spring 2015.

The move came as a part of DDR's Project Accelerate initiative that started in May this year. As per this multi-year proactive lease termination initiative, the company is gaining control of its premium store locations with below-market leases, from underperforming anchor tenants. It then aims to re-let these spaces to well performing tenants and enjoy mark-to-market rent appreciation of 30-40%.

As a matter of fact, The Shops at Midtown Miami is an urban power center and spans 645,000 square foot. The property is closely connected to the downtown, Miami Beach, the Port of Miami, and Miami International Airport. This 98% leased center boasts tenants lineup of renowned retailers such as Target Corp. ( TGT ), West Elm and The Home Depot, Inc. ( HD ).

The addition of such best-in-class retailer to one of DDR's top performing asset in Florida is encouraging. This will further enhance the value of The Shops at Midtown Miami, which has been producing a compound annual NOI growth rate of 32%, since 2010. Also, the deal strengthens DDR's ties with Nordstrom, which is in the top 40 tenant list of the company. Most importantly, the efficient retail space management by DDR through relocation and consolidation is poised to enhance the net operating income of this retail real estate investment trust (REIT).

DDR has scheduled the release of its third-quarter 2014 results on Oct 27. The Zacks Consensus Estimate for the same is currently pegged at 29 cents, representing year-over-year growth of 3.21%.

DDR currently holds a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
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