Daniel B. Hurwitz, CEO of DDR Corp. (NYSE: DDR), joined REIT.com for a CEO Spotlight video interview during REITWeek 2014: NAREIT’s Investor Forum, held in New York.
Hurwitz discussed his company’s efforts to transform its portfolio.
“We’ve come a long way,” he said. “In the last four or five years, we’ve sold about $4 billion worth of assets, but we’ve also purchased about $4 billion worth of assets. We’ve had a very aggressive capital recycling program that has resulted in a high-quality portfolio of power centers, high-credit-quality cash flow, very low accounts receivable, and very high lease rates and very high same store NOI growth. All of that is a very conscious effort to focus on quality because that was an issue that wasn’t focused on in the past and is something that we needed to refine within the context of our strategic plan.”
Hurwitz also talked about DDR’s decision to leave the Brazilian market.
“Part of having a great investment is knowing when to get in and when to get out,” he said. Hurwitz added that DDR’s Brazilian presence “complicated” the company’s story to investors.
“It added to our goal to simplify out story,” he said.
Hurwitz gave his thoughts on development in the retail sector. While some corners of the retail market are seeing growth via development, DDR specializes in power centers, which have yet to see rapid expansion.
“One of things that is driving our rental growth and occupancy gains is the fact that there is no new competition right now in the market and there is none in the foreseeable future. What you own is worth more,” he said. “As tenant demand continues to increase, supply continues to dwindle, and it’s a very friendly landlord environment in that regard.”
Hurwitz talked about the factors driving tenant demand, which he attributed to market share gains.
“The tenants that we predominately do business with… are winning the market share game on a consistent basis,” he said. “As a result, they’re looking to do more and more stores. With less and less being available through new construction, that obviously leaves our portfolio more valuable to those tenants. The tenants that are winning the market share game are the tenants that are growing the fastest.”