Salomon Smith Barney
March 2003
Section I
Corporate Overview
and
Financial Performance
2
DDR’s Mission Statement
The leading owner, developer and manager of marketdominant community shopping centers . . .
. . . provides the very best environments
for the nation’s most successful retailers
. . . where retailers can offer the most
convenient shopping experience for their
customers at an affordable cost.
3
Company Features
DDR
JDN(1)
DDR
(Pro Forma)
Total Market
Cap (Billions)
$3.9
$1.1
$5.0 (1)
Total Number of Retail
Operating & Development
Properties (2)
300
115
415
Total GLA(3)
62.0
24.7
86.7
43
15
44
Number of States
(1)
Pro forma 1Q2003.
(2) Includes properties owned and managed as of March 2003. Does not
include DDR’s 38 industrial and office properties.
(3) Includes managed properties and unowned anchors at company-owned
shopping centers as of March 2003.
4
Enhanced National Presence
Post-Merger Operating Portfolio
Strengthens leasing relationships with leading retailers
and maximizes operating efficiency.
2.8 msf
(3.6%)
3.1 msf
(4.1%)
2.6 msf
(3.4%)
3.5 msf
(4.6%)
4.0 msf
(5.2%)
8.5 msf
2.2 msf (11.1%)
(2.8%)
2.6 msf
2.4 msf
(3.4%)
2.2 msf
(3.2%)
(2.9%)
2.9 msf
2.1 msf
(3.8%)
(2.7%)7.3 msf
(9.5%)
5.9 msf
(7.7%)
GLA under
Management
by State
76 MSF / 44 States
Less than 500,000 SF
500,000 – 1.0 MSF
+1.0 – 2.0 MSF
+2.0 MSF
5
Enhanced National Presence
Post-Merger Operating & Development Portfolio
DDR
Existing Properties
Multiple Center Markets
Service Merchandise Properties
Multiple Services Merchandise
New Developments
Managed Properties
JDN
Operating Properties
Development Properties
6
National Presence
DDR’s Regional Offices
5
9
8
3
4
6
11
2
1
Development
7
Leasing
10
Operations
Leasing & Operations
1. Long Beach, CA - Development
2. Sherman Oaks, CA -Leasing /Operations
3. Salt Lake City, UT - Leasing /Develop. /Operations
4. Denver, CO - Leasing
5. Minneapolis, MN - Operations
6. St. Louis, MO - Leasing /Operations
7. Atlanta, GA – Leasing
8. Cleveland, OH - Corporate Headquarters
12 14
Leasing, Development & Operations
Coventry Real Estate Partners
13
9.
10.
11.
12.
13.
14.
New York, NY - Coventry Real Estate
Dallas, TX - Leasing
Durham, NC – Operations
Tampa, FL - Operations
Tampa, FL - Leasing
Orlando, FL – Leasing
7
DDR Business Plan
Focus on the ownership and management of high-quality
market-dominant community shopping centers
Cultivate premier relationships with the nation’s
leading retailers
Proactively replace underperforming tenants at
significantly higher rents
Maximize revenue generation from existing centers
 Expansion and redevelopment
 Ancillary income sources
8
DDR Business Plan
Recycle capital at positive spreads
 Opportunistic acquisitions
 Development of infill sites in major markets
Engineer innovative JV structures with institutional
capital partners
 Additional equity source
 Maximize returns on invested equity
9
Historical Stock Price
2x1
Stock Split
August 1998
Stock Price
Doubles
IPO Price
IP
O
-F
eb
'9
3
4Q
93
4Q
94
4Q
95
4Q
96
4Q
97
4Q
98
4Q
99
4Q
00
4Q
01
4Q
02
$23.00
$21.00
$19.00
$17.00
$15.00
$13.00
$11.00
$9.00
$7.00
$5.00
10
Outperformance During Recession
2002 Total Returns
30%
DDR
23.4%
20%
10%
0%
-10%
-20%
-30%
-40%
RMS
3.6%
-14.5%
DJIA
S&P -14.6%
-14.9%
Mid S&P
Cap
Small
Cap
-20.5%
Russell -22.1%
2000 S&P -31.2%
500
NASDAQ
11
DDR v. Russell 2000 v. S&P 500
$10,000 invested at IPO in 1993 . . .
Compound Annual Total Return
DDR
15.7%
S&P 500
9.2%
Russell 2000
4.5%
$45,000
$42,464
$40,000
$35,000
$30,000
$24,016
$25,000
$20,000
$15,464
$15,000
$10,000
DDR
S&P
500
Russell
2000
12
DDR v. Morgan Stanley REIT Index
$10,000 invested in 1996 . . .
$20,000
$19,402
Compound Annual Total Return
DDR
11.7%
RMS
5.7%
$15,000
$13,944
$10,000
$5,000
$0
DDR
RMS
13
Consistent FFO and Dividend Growth(1)
FFO (diluted) / Share
$3.00
Dividends / Share
$2.70(2)
$2.50
$2.00
$1.64
$1.50
Based on analyst’s
estimates for 2003,
FFO will have more than
tripled & dividends will
have more than doubled
since IPO.
Common share dividend
payout ratio has
declined from 82% in
1993 to approximately
60% budgeted for 2003.
$1.00
$0.50
93 994 995 996 997 998 999 000 001 002 003
9
1
1
1
1
1
1
1
2
2
2
2
Retained cash flow was
over $40MM in 2001,
approximately $50MM
in 2002, and is estimated
to exceed $50MM in 2003.
(1) Adjusted
to reflect a 2:1 stock split in 1998.
(2) Based on current First Call consensus estimates.
14
Historical Price/FFO Multiple
16
14
12
DDR Avg. Multiple = 10.0
10
8
6
4
2
0
4Q93 4Q94 4Q95 4Q96 4Q97 4Q98 4Q99 4Q00 4Q01 4Q02
15
Internal Growth:
Leasing Spreads
9%
Avg. Increase
on Renewals
23%
Avg. Increase
on New
Leases
30%
25%
20%
15%
10%
5%
New Leases
Renewals
02
4Q
02
3Q
02
2Q
02
1Q
01
4Q
01
3Q
01
2Q
1Q
01
0%
Weighted Average
16
Internal Growth:
Releasing & Contractual Rent Steps
Lease Revenues Expiring
Lease Revenues Subject to Steps
Lease Revenues (Millions)
$45
Average Rent
Spread on
Releasing
12.0%-16.5%
Average
Contractual Rent
Step 7.6%
$40
$35
$30
$25
$20
$15
$10
$5
$0
2003
2004
2005
2006
2007
17
2002 Capital Recycling
Retail Property Acquisitions & Dispositions
Acquisitions(1)
Dispositions
Total Acquisitions - $538 million
Total Dispositions - $313 million
DDR’s pro rata share - $387 million
DDR’s pro rata share - $143 million
Total SF - 4.8 MSF
Total SF – 2.3 MSF
Wtd. Avg. Cap Rate – 10.0%
Wtd. Avg. Cap Rate – 9.0%
Developments – Completed
Net Project Cost - $185 million
DDR’s pro rata share - $85 million
Total SF – 2.0 MSF
Wtd. Avg. Unleveraged
Cash on Cost Return – 11.5%
(1)
Includes three acquisitions made in January 2003.
18
Annualized 3 Year Total Return
(2000 - 2002)
35%
30%
DDR Total Returns
2002 – 23.4%
2001 – 56.7%
2000 – 14.7%
30.3%
27.1%
25%
20%
20.4%
18.1%
18.1%
17.7%
WRI
KI M
NXL
15%
10%
5%
0%
DDR
DDR
REG
FRT
19
FFO Growth Rates 2001-2003
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
13.4%
13.2%
2001 2002
2002 2003
DDR
5.0%
8.0%
FRT
KIM
NXL
REG
WRI
-4.0%
1.3%
1.1%
4.7%
7.2%
-1.1%
4.6%
2.7%
4.5%
5.5%
9.4%
6.0%
3.8%
-5.1%
DDR
DDR
WRI
REG
KIM
NXL
FRT
Source: First Call (as of 3/7/02)
20
FFO Multiple / FFO Growth Rate(1)
3.50
3.08
3.00
2.50
2.39
2.09
2.00
1.74
1.50
1.00
1.02
0.50
DDR
DDR
WRI
(1) FRT (-14.17) not listed.
KI M
REG
NXL
21
Overall Ranking
Company’s Rank (Best to Worst) according to Total Return,
FFO Growth & FFO Multiple/FFO Growth Rate
18
18
16
14
13
12
12
10
9
8
6
6
5
4
2
0
DDR
DDR
WRI
REG
KI M
FRT
NXL
22
Consistent Outperformance
DDR continues to offer income at a favorable value,
outperforming expectations for the REIT industry
10%
8%
7.4%
8.0%
9.5x 8.1x
7.2%
6%
Salomon Smith
Barney REIT
Universe
DDR
4%
2%
Assumes DDR
stock price of
$22.75 per share.
0%
-2%
(2.3%)
-4%
Dividend Yield
FFO Growth
FFO Multiple
23
Section II
Retail Industry Overview
24
Shifts in Consumer Preferences
DDR is well positioned to benefit from long-term trends in
the retail industry:
From traditional department stores to discount
department stores
From enclosed mall anchors and specialty tenants to
community shopping center discounters
From neighborhood groceries to supercenters
25
Shift to Discount Department Stores
Discount department stores capture market share
at the expense of traditional department stores
60%
55%
50%
45%
Discount Dept.
Stores
Traditional
Dept. Stores
40%
35%
30%
Source: U.S. Census,
Property & Portfolio
Research.
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
25%
20%
26
Retail Market Cap Analysis
(in Billions, as of 4Q02)
Wal*Mart’s market cap
alone is seven times
larger than that of the
entire traditional
department store sector
$50
$228
$30
$13
$28
$20
Wal* Mart
Home Depot
Lowe's
Target
Kohl's
Costco
Traditional Dept. Store
Total: $33 Billion
Discount Dept. Store & Home
Improvement Total: $369 Billion
$7
$6
$6
$9
$2
Sears
Federated
May Co.
Nordstroms
$3
JC Penney
Saks
27
Shift to Community Centers
Retailers’ Same Store Sales – Last 24 Mos.
15%
15%
Community Ctr – Discount Dept
Stores 4.5%
Power Ctr – Hard Goods/Big Box
Retailers 4.2%
Community Ctr Retailers 4.1%
Mall Anchors -2.4%
Mall Specialty Retailers -3.6%
10%
10%
5%
5%
0%
0%
(5%)
-5%
(10%)
-10%
02
ec
D
-0
2
ct
O
Au
g02
-0
2
Ju
n
-0
2
Ap
r
Fe
b-
01
ec
D
-0
1
ct
O
Au
g01
-0
1
Ju
n
-0
1
Ap
r
01
Fe
b-
02
Source: Merrill Lynch “Same Store Sales Monitor”
(15%)
-15%
28
Shift to Grocery Supercenters
Traditional grocers’ market share of U.S. grocery sales
dropped from 85% in 1992 to approximately 40% in
2001
Supercenter and wholesale clubs represented over
30% of retail grocery sales in 2001
Wal*Mart’s grocery sales of $65 billion in 2001 topped
Kroger’s sales of $50 billion, making it the largest
grocery retailer in the country
Source: Supermarket News, ICSC, USA Today.
29
Wal*Mart Growth in
Supermarket Sales
Wal*Mart’s supermarket and pharmacy-related sales growth is expected
to increase more than 5x faster than other industry participants’ sales
Growth in Sales
(Percentage)
180
160
140
120
100
80
2001
20012002
20022003
20032004
Total Market (Excluding Wal* Mart)
Source: Goldman Sachs; September 25, 2002.
20042005
20052006
Wal* Mart
30
Wal*Mart Pricing Advantage
Supermarket Related Sales
On a sample shopping trip, Wal*Mart’s supercenter
prices registered 22% below the market average
Avg. Premium to
Wal*Mart Prices
40.0%
30.0%
20.0%
10.0%
0.0%
Kroger
Safeway
Albertson's
Source: Goldman Sachs; September 25, 2002.
Market
Average
31
Wal*Mart Pricing Advantage
General Merchandise Sales
Kroger
Source: Goldman Sachs; September 25, 2002.
Safeway
er
th
O
St
at
io
ne
ry
o
Au
t
/
ea
lth
H
ic
Ch
em
Pe
ts
60%
50%
40%
30%
20%
10%
0%
al
s
Avg. Premium to
Wal*Mart Prices
On a sample shopping trip, Wal*Mart’s general merchandise
prices registered 28% below the market average
Albertson's
32
Growth in Retail Supply (Per Capita)
v. Retail Sales (Per Capita)
Over the last 20 years, retail sales per capita has grown
at a higher rate than retail square feet per capita
150
Index 1982 = 100
140
130
120
110
100
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
90
SF per Capita
Real Retail Sales per Capita
Source: Economy.com, Portfolio & Property Research.
33
Growth in Retail Supply (Per Capita)
v. Retail Sales (Per SF)
Based on the growth of retail sales per square foot, the utility
of additional retail space is increasing at a similar rate
Index 1982 = 100
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
125
120
115
110
105
100
95
90
SF per Capita
Real Retail Sales per SF
Source: Economy.com, Portfolio & Property Research.
34
Section III
Portfolio Overview
35
Community Center Portfolio
DDR’s investment strategy is to own and operate market
dominant community centers that draw shoppers from the
immediate neighborhood as well as the surrounding trade area.
250,000 - 1,000,000 square foot, open-air shopping centers
2 or more strong national tenant anchors such as Wal-Mart,
Kohl’s, Target, Home Depot, or Lowe’s
2 or more medium-sized national big-box tenants such as
Best Buy, Bed Bath & Beyond, TJ Maxx, or Michael’s
20,000 - 80,000 square feet of small shops
2 - 4 outparcels available for sale or groundlease
36
Post Merger Reliance on Major Tenants(1)
Owned Locations
Tenant
Wal-Mart/Sam’s Club
Lowe’s Home Improvement
Kohl’s
T.J. Maxx/Marshall’s
PetsMart
Best Buy/Musicland Group
OfficeMax
Bed Bath & Beyond
AMC Theater
Kroger
Michael’s
Gap/Old Navy/Banana Rep.
Barnes & Noble
Linens ‘N Things
Toys “R” Us
Subtotal
Total
(1)
Units
Total Base Rent
(millions)
Percent
of Total
29
16
34
51
39
28
37
32
5
17
28
31
33
13
16
$15.89
$15.66
$12.46
$9.39
$7.98
$7.91
$7.47
$7.09
$5.90
$5.70
$5.09
$4.81
$4.75
$4.19
$3.66
4.2%
4.1%
3.3%
2.5%
2.1%
2.1%
2.0%
1.9%
1.5%
1.5%
1.3%
1.3%
1.2%
1.1%
1.0%
409
$117.94
31.0%
$390.40
100.0%
Credit
Ratings
AA/Aa2
A/A3
A-/A3
A/A3
B+/Ba3
BBB-/Baa3
NR/NR
BBB-/NR
NR/B2
BBB-/Baa3
BB/Ba1
BBB-/Ba3
BB/Ba3
NR/NR
BBB/Baa3
Based on actual pro rata ownership of real estate assets, calculated on owned shopping enter GLA only.
Also includes tenants in Service Merchandise portfolio.
37
Post Merger Major Tenants by
% of Base Revenues(1)
State
DDR
JDN
Pro Forma
4.0%
4.8%
4.2%
1.
Wal*Mart/Sam’s Club
2.
Lowe’s Home
Improvement
1.6
12.0
4.1
3.
Kohl’s
2.8
4.7
3.3
4.
T.J Maxx/Marshall’s
2.4
2.8
2.5
5.
PetsMart
1.9
2.8
2.1
6.
Best Buy/Musicland
2.3
1.5
2.1
7.
Officemax
2.1
1.4
2.0
8.
Bed Bath & Beyond
2.5
---
1.9
9.
AMC Theater
2.0
---
1.5
10.
Kroger
1.0
3.1
1.5
Total
22.5%
(1) Based on pro rata share of joint venture assets.
33.2%
25.1%
38
Post Merger Major Tenants by GLA
Owned and Unowned Locations
Tenant
Total
Units
Total SF
(Millions)
Owned
Units
Non -Owned
Units
1.
Wal-Mart/Sam’s
84
12.1
29
55
2.
Lowe’s Home Improvement
30
3.8
16
14
3.
Target/Mervyn’s
25
2.9
5
20
4.
Home Depot
23
2.3
6
17
35
2.1
34
1
5.
Kohl’s
6.
T.J. Maxx/Marshall’s
51
1.7
51
0
7.
Kmart
17
1.5
15
2
8.
Kroger
20
1.2
17
3
29
1.1
28
1
32
1.0
32
0
9.
10.
Best Buy/Musicland
Bed Bath & Beyond
39
Post Merger Geographic Distribution
by % of GLA (1)
State
DDR
1.
Ohio
14.3%
2.
Georgia
1.9
32.9
9.5
3.
Florida
8.2
6.4
7.7
4.
Texas
5.0
5.6
5.2
5.
California
6.2
---
4.6
6.
Michigan
4.2
3.9
4.1
7.
South Carolina
4.5
1.9
3.8
8.
Minnesota
4.8
---
3.6
9.
Utah
4.5
---
3.4
10.
Missouri
4.4
0.4
3.4
Total
58.0%
JDN
1.1%
52.1%
Pro Forma
11.1%
56.5%
(1) Total square feet under management. Assumes 100% ownership of joint venture assets.
40
Case Study:
HomePlace Retenanting
DDR has consistently demonstrated its ability to quickly
and profitably re-tenant space left from bankrupt tenants
Received 630,000 sf in 12 twelve locations in April
and July of 2001
By year-end 2001, DDR had nearly 550,000 sf
leased or under LOI, representing the recapture of
100% of the HomePlace rent
41
HomePlace Retenanting
Center
New Tenants
Phoenix, AZ
Ashley’s Furniture
The Oak Store
Denver, CO
Cost Plus
Loehmann’s Furniture
Maple Grove, MN
Months to
Re-lease (1)
% Increase
in Rent
2
12
82%
5
7
68%
Bed Bath & Beyond
Michael’s
-02
44%
Canton, OH
HHGregg
Arhaus
-08
38%
Portland, OR
Famous Footwear
Linens N’ Things
5
6
27%
N. Olmsted, OH
Bed Bath & Beyond
Pier One
-05
24%
(1)
From lease rejection date to final lease execution. Letters of intent are typically
signed 30 to 90 days prior to lease execution.
42
HomePlace Retenanting
Center
New Tenants
St. Louis, MO
Bed Bath & Beyond
David’s Bridal
Marietta, GA
Ross Dress
Cargo Furniture (Pier 1)
Atlanta, GA
Sports Authority
Columbus, OH
Michael‘s
Dress Barn
The Avenue
Eagan, MN
Bed Bath & Beyond
PetsMart
San Antonio, TX
OfficeMax
(1)
Months to
Re-lease (1)
-08
% Increase
in Rent
21%
6
12
17%
9
14%
8
11
11
11%
-010
7%
9
4%
From lease rejection date to final lease execution. Letters of intent are typically
signed 30 to 90 days prior to lease execution.
43
Average Annualized Base Rental Rates
(as of 4Q02)
Shop Space
Total Portfolio
$15
$15.18
$10
$10.58
$5
$0
'87
'89
'91
'93
'95
'97
'99
'01
4Q02
44
Historical Occupancy Rates
DDR has averaged nearly 96% occupancy since
1987
95%
90%
85%
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
80%
45
Service Merchandise
(as of 4Q02)
Capital Structure
Portfolio
DDR (24.6%)
Klaff Realty (12.3%)
Lubert Adler (61.6%)
Special Member (1.5%)
Total Capital
Actual Debt
Anticipated Debt
Total Debt & Equity
$19.5
9.7
48.6
1.3
$79.1
$89.6
66.3
$235.0
Fee Interests Sold, Leases
Assigned, Direct Leases
and Subleases
Leases Expired or Rejected
Vacant or Partially Leased
Management
Development
DSW Shoe Warehouse
Leasing
Disposition
76
70
Major Tenants
Value City Furniture
Fees to DDR
130
TJ Maxx/Marshalls
Bed Bath & Beyond
Dollar Tree
PetsMart
Best Buy
Circuit City
A.C. Moore
46
Section V
DDR/JDN Merger
Overview
47
Traffic Generating Anchors
(1)
75% of DDR assets and approximately 55% of JDN
assets have either a discount or traditional department
store
50% of DDR assets and approximately 40% of JDN
assets have a grocery component
40% of DDR assets and over 20% of JDN assets have
both a home improvement store and a discount or
traditional department store
Over 45% of DDR revenues and over 60% of JDN
revenues are generated by short term leases to specialty
store tenants
48
Highly Accretive Use of DDR Stock
Overall capitalization rate of 9.8%, or 10.6% after adjusting
for the impact of non-income producing land assets
Estimated annual accretion of 5% reflects dilutive impact
of land assets
Further accretion potential as development is completed
and pipeline is built out
However, anticipated sales of certain non-core retail
assets will dilute total accretion
49
Land and Development Portfolios
Provide Future Upside
DDR uniquely qualified to incorporate JDN’s development
portfolio into its existing operations
Properties currently under development create embedded
growth
DDR’s strong tenant relationships will enhance the
profitability of the development pipeline
Potential sale of land and outparcel portfolio, comprised of
over 600 acres, provides additional opportunity to raise
capital accretively
50
Development Portfolio
DDR
JDN
DDR
(Pro Forma)
7
19
26
3.0
6.3
9.3
6
9
15
2.6
1.9
4.5
Properties Under Development
Number
GLA (MSF)
Development Pipeline
Number
GLA (MSF)
51
JDN Development Portfolio
JDN has 19 development projects currently under
construction
 Total GLA is 6.3 MSF. Total owned GLA is 3.0 MSF,
of which over 1.5 MSF is open and operating
 Total cost to complete as of 1Q03 is
approximately $46MM
 Over 80% pre-leased
 Estimated annual NOI of over $33MM
DDR will pursue 9 former JDN pipeline development projects
 Total GLA is approximately 1.9 MSF
 Total project cost is approximately $120MM
 Estimated annual NOI of approximately $13MM
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DDR Development Portfolio
DDR has 7 development projects currently under construction
 Total GLA is 3.0 MSF. Total owned GLA is
approximately 2.0 MSF, of which approximately
900,000 square feet is open and operating
 Total cost to DDR to complete as of 1Q03 was
estimated to be approximately $104MM
DDR has 6 pipeline development projects
 Total GLA is approximately 2.6 MSF
 Total estimated project cost of approximately
$260MM
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Leverages Existing Platform
Broadens DDR’s existing relationships with the nation’s
leading retailers, particularly Wal*Mart, Sam’s Club,
Lowe’s Home Improvement, Kohl’s and TJX
 DDR’s top 10 tenants comprise nearly 30% of
JDN’s GLA and 20% of JDN’s revenue base
Maintains a geographically diverse portfolio, with centers
located across 44 states
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Improves Industry Position
Transaction represents an excellent fit of core assets for
DDR, plus a pipeline of development opportunities where
DDR can use its core skills to add value on an ongoing basis
Strengthens DDR’s position as the nation’s leading owner,
operator and developer of market-dominant community
shopping centers
Increases DDR’s market capitalization by over 35% to
$5 billion
Creates the largest shopping center REIT by market
capitalization and by GLA under management
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