DDR Corp. (DDR) disclosed the strengthening of its ties with Nordstrom Inc. (JWN) through the opening of the Nordstrom Rack outlets at two shopping centers – Lake Brandon Plaza and Harbison Court – in Brandon (Florida) and Columbia (South Carolina), respectively. The move upgraded Nordstrom to DDR's top 40 tenants as per the annual base rent generation.
Lake Brandon Plaza is a fully leased prime power center and spans 440,442 square feet. To accommodate a Nordstrom Rack store in the property, that will span 32,000 square feet, DDR did not renew the lease for the Babies "R" Us outlet and repositioned and merged two small shop units. The power center boasts several other well-known retailers such as Publix and buybuy BABY.
Another power center, Harbison Court spans 317,066 square feet and is 96% leased to industry giants like Pier 1 Imports, Inc. (PIR), Ross Dress for Less and Anna's Linens. DDR will let Nordstrom a 34,000 square feet space at this property through the non-renewal of its lease with Barnes & Noble, Inc. (BKS) and merging of two small shop units and a non-income-producing storage unit. As a matter of fact, along with the addition of the Nordstrom outlet, Harbison Court will undergo a façade refurbishment.
DDR anticipates the opening of these two Nordstrom outlets in the fall of this year. The extension of DDR’s alliance with this high-end retailer is encouraging and Nordstrom’s promotion to the company’s top 40 list ensures greater revenue contribution from this tenant. Moreover, the efficient retail space management through relocation and consolidation is poised to enhance its net operating income.
DDR is slated to report its fourth-quarter 2013 earnings on Feb 12, 2014, after the closing bell.The Zacks Consensus Estimate for core funds from operations (:FFO) per share for the fourth quarter is pegged at 29 cents per share, depicting a year-over-year increase of 7.98%.
Currently, DDR has a Zacks Rank #3 (Hold).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.