1 Colgate Real Estate Workshop Matt Lougee ‘07 Director of Finance Developers Diversified Realty September 25-26, 2009

2 The Basics What’s a REIT?A Real Estate Investment Trust is a corporation that uses the pooled capital of investors topurchase and manage income-producing property. To qualify as a REIT, the company mustpay out at least 90% of its taxable income in the form of a dividend. REIT’s offer investors aliquid way to own real estate that combines the bond-like income stream from dividends withthe price risk and growth potential found in traditional stocks. DDR at a GlanceAssets Under Management $18.4 billion Properties Owned and Managed 703 Gross Leasable Area 153 million sq. ft. Leased Rate - IPO (1993) 95.7% Leased Rate – Current 90.7% Avg. Lease Term 7 years Employees 770

3 DDR’s Diverse Geographic Presence 13.6 msf 8.9% 5.8 msf 3.8% GLA by State +5.0 MSF +1.0 – 5.0 MSF Less than 1.0 MSF 5.0 msf 3.2% 153 MSF in 45 states plus Puerto Rico, Brazil, and Canada 10.2 msf 6.7% 16.6 msf 10.8% 15.2 msf 9.9% 7.4 msf 4.8% 5.2 msf 3.4% 9.4 msf 6.1% 5.0 msf 3.3% Puerto Rico Brazil

4 The Downfall – What happened to REITs? 1. Capital Markets effectively shut down – Risk Re-priced - No access to equity and debt – Fear and Irrationality- Inability to refinance upcoming debt maturities- Inability to finance transactions- No way to fuel growth / returns 2. Declining Fundamentals - Consumer staying home - Declining Occupancy – Weak tenants go bankrupt - Linens N Things, Circuit City, Steve & Barry’s - Declining NOI growth and Leasing spreads = Declining 1. Asset Values2. REIT Stock Prices

5 The Downfall

6 The Solution: Recapitalize the Balance Sheet

7 #1 – Term Asset-Backed Loan Facilities (TALF) Investors borrow from the Fed, then lend to REITs Lower borrowing rate than other sources of debt capital Loan secured by first mortgage in a cross-collateralized pool of assets Functions as a catalyst to restart the securitized lending market (CMBS) More scrutinized standards for ratings Conservative underwriting vs. Dominance of speculation ($600B ’05 – ’07)

8 #2: Repurchase Bonds at Discounts to Par Note: $227 million of our January 2009 notes were repaid at par in January

9 Investors recognizing progress

10 The Future of Commercial Real Estate The “New Normal” – Deep Recession ≠ Strong Recovery - Unemployment: +/- 10% (CRE / Unemployment – Lagging Indicators) - Savings Rate: “Paradox of Thrift” = Saving $ generates less economic activity - Government: Privatize Profits, Socialize Losses, Printing Prosperity? - Rational Credit Markets / Subdued Risk Appetite REIT Recapitaliztion – “Re IPO” - Equity Raised - $17 billion - Debt Raised - $9 billion - REITs as Fixed Income or Total Return? Opportunity: “Dry Powder” - Money waiting on the sidelines for trough valuations and distressed operators Weed out bad retailers - Focus on credit quality and profit margin Fundamentals - New development at historic lows; opportunity for absorption of supply - Long term leases - Resiliance of consumer Industry talent gap - Entry level jobs extremely difficult - Tangible product - Opportunity to work in multi-dimensional sector with little peer competition - Risk-perspective