DDR Corp. Headquarters - Beachwood OH.jpg
DDR Corp., a publicly traded real estate investment trust, reported third-quarter financial results on Monday. The company's search for a new chief executive could overshadow the numbers during a conference call Tuesday morning.
(DDR Corp.; Roger Mastroianni )
BEACHWOOD, Ohio -- Shopping-center landlord DDR Corp. reported improved third-quarter results Monday, generating higher funds from operations and turning a profit.
Those numbers will be the subject of a Tuesday morning conference call with investors and analysts who track the Beachwood-based company. But don't be surprised if the pending departure of Daniel Hurwitz, the company's chief executive officer, and the search for his replacement end up dominating the discussion.
DDR announced last month that Hurwitz and the company's board of directors agreed not to renew his employment agreement, which expires at the end of next year. Some analysts immediately pointed to David Oakes, the company's president and chief financial officer, as a logical successor. But DDR's board is taking its time, hiring an executive search firm to scour the market for potential executives.
The leadership change creates a bit of uncertainty around a company that, by and large, has dug itself out of a hole since the recession. Monday's earnings report showed that DDR continues to shed unwanted real estate, buy better properties and seek opportunities to charge more for space within its existing portfolio.
"The continued execution of our strategic plan has resulted in another consistently strong quarter," Hurwitz said in a written statement. "Our portfolio and operating platform continue to perform at a high level, and the outlook for our business remains robust."
The company owns and manages 456 shopping centers in the United States and Puerto Rico. Here are a few highlights from DDR's third-quarter report:
- Funds from operations, a key performance yardstick for real estate investment trusts like DDR, jumped 23 percent to $110.8 million or 31 cents per share. The company strips out unusual items to arrive at a more pared-down metric called "operating funds from operations." That measurement rose 17.9 percent from a year before, to $106.2 million or 29 cents per share.
- DDR swung to a profit of $63 million, or 17 cents per share, from a loss of nearly $7 million, or 2 cents per share, a year before.
- Rents are inching up, thanks to a mix of basic increases, property sales and acquisitions. And space at DDR shopping centers is more full than it was year ago. The company said its U.S. portfolio was 95.6 percent leased at the end of the quarter, up from 94.8 percent as of Sept. 30, 2013.
- The company keeps selling off unwanted international assets, in an attempt to tell a simpler, more streamlined story to investors. DDR
- DDR hasn't stopped buying. During the third quarter, the company stepped up to become the sole owner of seven shopping centers that it previously owned through a joint venture with the Blackstone Group, a New York investment giant. This month, a new DDR-Blackstone venture
DDR's shares, listed on the New York Stock Exchange, closed trading Monday at $17.86, up 0.34 percent or 6 cents.