Green Street



DDR Says Planned RVI Spin-Off is “Sound Strategy” to Create Shareholder Value

According to

DDR Corp. (NYSE: DDR) said its plan to spin off lower-quality U.S. shopping centers and its Puerto Rico assets will create value for shareholders and complete the retail REIT’s broader portfolio transformation.


With the creation of RVI, DDR now has a path to realizing net asset value (NAV), according to Green Street Advisors. The firm says that with the Puerto Rico overhang removed, DDR’s remaining centers are of a higher quality. Green Street predicts that each standalone entity will now trade better than the former combined REIT.

“In our opinion, [DDR was] being heavily undervalued,” said Vince Tibone, an analyst on Green Street’s retail team. He said that RVI is effectively a liquidity trust, which is what he finds so interesting about the spinoff.

Tibone acknowledged that there will still be rent roll-downs in Puerto Rico over the next two years. “The management team is candid that there are some above-market leases that are rolling. It’ll be a battle to show that the cash flows are stable from these properties,” he said.


“It’s going to take time to deliver, but they’ve done a great job so far,” Tibone said. “They’ve done all the right things, [and] they’re positioning the company for the future.”

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