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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 16, 1998
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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 (440) 247-4700
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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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On July 16, 1998, the Company (i) acquired thirteen shopping centers,
aggregating approximately 1.5 million square feet of gross leasable area, (ii)
formed a joint venture, in which the Company owns a 50% interest, to pursue
projects in the Sansone development pipeline and to create new development
opportunities throughout the central Midwest, and (iii) acquired a 50% interest
in the Sansone's operating/management company from the Sansone Company. The
Company's net investment in this transaction is approximately $167
million. Upon completion of construction the Company will also acquire two
remaining shopping centers aggregating approximately 40,000 square feet will
be acquired at a projected cost of approximately $5 million which will
increase the Company's total investment to approximately $172 million.
Information regarding the aforementioned properties is attached as SCHEDULE A.
The acquisition of these Properties, and investment in the two joint ventures
were pursuant to agreements for the sale and purchase of each property or
interests therein between each selling entity and the Company. The factors
considered by the Company in determining the price to be paid for the properties
and related operating companies included their historical and/or expected cash
flow, nature of the tenants and terms of leases in place, occupancy rates,
opportunities for alternative and/or new tenancies, current operating costs and
taxes on the properties and anticipated changes therein under Company ownership,
the outlots and expansion areas available, projects included in the Sansone
development pipeline the physical condition and locations of the properties, the
anticipated effect on the Company's financial results (including particularly
Funds From Operations) and the ability to sustain and potentially increase its
distributions to Company shareholders, 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 related to the properties themselves and their fit
with the Company's operations. Separate independent appraisals were not obtained
in connection with the acquisition of the properties or joint venture interests
by the Company. The Company, after investigation of the properties, is not aware
of any material factors, other than those enumerated above, that would cause the
financial information reported, where available, to not be necessarily
indicative of future operating results.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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Substantially the same information required by paragraph (a) of Item 7 - the
financial statements of acquired properties; paragraph (b) of Item 7 - The Pro
Forma Financial information and paragraph (c) of Item 7 - the Exhibits, have
been previously reported by the Company in its Form 8-K dated April 28, 1998. In
accordance with General Instruction B3 to Form 8-K, such information is not
reported in this Form 8-K.
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SCHEDULE A
DEVELOPERS DIVERSIFIED REALTY CORPORATION
Sansone Properties Portfolio
<TABLE>
<CAPTION>
Company
Owned
Date of Properties Percent Year
Shopping Center Acquisition Square Feet Occupied Completed Principal Tenants
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<S> <C> <C> <C> <C> <C>
Plaza at Sunset Hill Marshall's, Home Depot, Homeplace and
St. Louis, MO 07/16/98 328,850 95% 1997 Petsmart
Shoppes at Sunset Hill
St. Louis, MO 07/16/98 97,678 94% 1998 Comp USA, Toys R Us, and Cost Plus
Promenade at Brentwood Target, Sports Authority, and
St. Louis, MO 07/16/98 299,205 100% 1998 Petsmart
Northland Square
Cedar Rapids, IA 07/16/98 187,068 100% 1994 TJ Maxx, Office Max, Barnes &Noble, and Kohl's
Olympic Oaks Village
St. Louis, MO 07/16/98 92,399 95% 1985 TJ Maxx
Gravois Village
St. Louis, MO 07/16/98 110,992 97% 1983 KMart
Morris Corners
Springfield, MO 07/16/98 56,033 100% 1989 Toys R Us
Keller Plaza
St. Louis, MO 07/16/98 52,842 100% 1988 Wehrenberg Theatres, and County Government
Southtowne
St. Louis, MO 07/16/98 144,808 100% 1995 Home Quarters Warehouse
Home Quarters
St. Louis, MO 07/16/98 100,911 100% 1992 Home Quarters
American Plaza Home Depot, Sears Roebuck & Co, Sweet
St. Louis, MO 07/16/98 17,500 100% 1998 Traditions, and American
Walgreen
Brentwood, MO 07/16/98 17,504 100% 1988 Walgreen
Walgreen Plaza
St. Louis, MO 07/16/98 15,437 100% 1988 Walgreen
Walgreen Probable
St. Louis, MO Acquisition 25,855 54% 1998 Walgreen
Walgreen Probable
Springfield, MO Acquisition 13,905 100% 1998 Walgreen
</TABLE>
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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 31, 1998 /s/ William H. Schafer
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William H. Schafer
Vice President and Chief Financial Officer
