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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 2, 1996
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DEVELOPERS DIVERSIFIED REALTY CORPORATION
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(Exact name of registrant as specified in its charter)
Ohio 1-11690 34-1723097
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(State or other Jurisdiction (Commission (IRS Employer
or incorporation) File Number) Identification Number)
34555 Chagrin Boulevard, Moreland Hills, Ohio 44022
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Registrant's telephone number, including area code (216) 247-4700
N/A
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(Former name of former address, if changed since last report)
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ITEM 2. Acquisition or Disposition of Assets
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During the period May 31, 1996 (the date of the most recent current Report on
Form 8-K disclosing the Company's financing activity through that date) through
July 2, 1996, through individual transactions with Opus Southwest
Coroporation, Opus South Corporation, Opus North Corporation and Opus
Corporation, the Company acquired four shopping centers, none of which
collectively or individually constitutes a "significant subsidiary". The
shopping centers total 1,395,207 square feet of retail space, 946,628 of which
is Company-owned gross leasable area. The initial purchase price for the four
shopping centers aggregated approximately $80.1 million. Two of these centers
include areas in which the sellers have the right to earn additional amounts of
approximately $8.0 million relating to the purchase price for the leasing of
the remaining unleased space based on rental rates in leases signed after
closing. The Company paid the purchase price with funds available under
revolving credit agreements. Information regarding the four acquired shopping
centers is attached as SCHEDULE A.
In addition, the Company entered into agreements to acquire one newly
constructed shopping center located in Portland, Oregon and two Phase II areas
of the acquired shopping centers, as discussed above, which are currently under
construction. The Company also agreed to purchase Phase II of the Portland,
Oregon shopping center if it is constructed and leased by December 31, 1997.
These shopping centers are expected to contain an aggregate of approximately
823,000 total square feet of retail space, 495,000 of which will be Company
owned. The Company anticipates that the Portland, Oregon shopping center
and two Phase II developments will be acquired upon completion of construction
and/or lease-up for an aggregate additional purchase price of approximately
$66.9 million. The properties discussed above which have not been acquired as
of July 2, 1996, will herein be referred to as "Probable Acquisition
Properties." Although the Company believes it is probable that these properties
will be acquired, there can be no assurance that the purchase transactions will
be consummated.
The acquisition of each of the four shopping centers were, and the Probable
Acquisition Properties will be, pursuant to separate Agreements for the Sale and
Purchase of each property between each selling entity and the Company. The
factors considered by the Company in determining the price to be paid for the
properties included their historical and/or expected cash flow, nature of the
tenants and terms of leases in place, occupancy rates, opportunities for
alternative and new tenancies, current operating costs and taxes on the
properties and anticipated changes therein under Company ownership, expansion
areas available, the physical condition and locations of the properties, the
anticipated effect on the Company's financial results and other factors. The
Company took into consideration capitalization rates at which it believes other
shopping centers have recently sold, but determined the price it was willing to
pay primarily on the factors discussed above relating to the properties
themselves and their compatibility with the Company's operations. No appraisals
were obtained in connection with the acquisition of the properties by
the Company.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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Financial Statements and Pro Forma Financial Information are not presented since
the four Acquired Properties and the Probable Acquisition Properties were under
construction and/or lease up phases through the time of purchase.
Accordingly, the inclusion of this information is not considered meaningful.
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SCHEDULE A
Developers Diversified Realty Corporation
Company
Date of Owned Percent Year
Shopping Center Acquisition Square Feet Occupied Completed Principal Tenants
Oshmans, Circuit City, Linens N Things,
Arrowhead Crossing Barnes & Noble, Lil Things, T. J. Maxx
Phoenix, AZ 07/02/96 346,913 94.9% 1995 and Fry's Supermarket (not owned)
Target (not owned), Kohl's,
Maple Grove Crossing Homeplace, Barnes & Noble
Minneapolis, MN 07/02/96 250,269 100.0% 1995 and Cub Foods (not owned)
Target (not owned), Borders Books,
Highland Grove Kohl's, Marshall's, Circuit City
Highland, IL 07/02/96 174,292 100.0% 1995 and Jewel Osco (not owned)
East Chase Market Target (not owned), MJ Designs, Ross,
Fort Worth, TX 07/02/96 175,154 92.7% 1996 Petsmart and Toys R Us
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
Date July 16, 1996 /s/ William H. Schafer
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William H. Schafer
Vice President and Chief Financial Officer