DDR CEO Hurwitz to Depart at End of 2015
- Sep 15, 2014
By Barbra Murray, Contributing Editor
DDR Corp. made an unexpected announcement on Friday that CEO Daniel Hurwitz will leave the shopping center REIT after his employment agreement expires at the close of 2015. According to the announcement, Hurwitz and the board of directors agreed not to renew the contract.
“One thing I can say with certainty is that I think (the news) was a surprise to just about everybody in the investment community,” Rich Moore, an analyst with investment banking firm RBC Capital Markets, told Commercial Property Executive.
The announcement comes roughly four years after Hurwitz became CEO. He has worked his way to the top at DDR, starting with the company in 1999 as executive vice president of leasing and moving up to executive vice president of leasing & development in 2002, senior executive vice president & chief investment officer in 2005 and president & COO in 2007, before ascending to the role of CEO on Jan. 1, 2010.
During his tenure as CEO, Hurwitz has overseen some of the 50-year-old company’s biggest events, including its name change from Developers Diversified Realty Corp. to DDR in 2011, which acknowledged the REIT’s shift from a diversified retail property owner and developer to an owner and manager focused on open-air, value-oriented shopping centers.
Hurwitz’s fingerprints are also on the establishment of major joint venture endeavors with private equity firm Blackstone Group. The companies partnered on the $1.4 billion acquisition of the 10.6 million-square-foot, 46-property EDT Retail Portfolio from EPN Group in 2012. And most recently, in June of this year, DDR and Blackstone formed a joint venture to purchase a 16.4 million-square-foot portfolio of 76 shopping centers from American Realty Capital Properties Inc. for nearly $2 billion.
Today, DDR owns and manages 390 value-oriented shopping centers totaling 108 million square feet in 39 states and Puerto Rico. The second quarter of 2014 marked the REIT’s ninth consecutive quarter of same-store net operating income growth exceeding 3 percent.
“Together, we have made great strides toward becoming an industry leader,” Hurwitz stated in the press release on his impending departure. “DDR’s next CEO will inherit a high-quality portfolio of assets operated by even higher-quality people. I am confident that DDR’s best days are yet to come.”
In the same press release, Terrance Ahern, chairman of the board, said, “For more than 15 years, Dan has played key roles in DDR’s strategy of building a high-quality operating platform, prime portfolio and strong balance sheet. We thank him for his many contributions.” A DDR spokesperson confirmed to CPE that the company is not providing additional information at this time.
Questions abound. “I don’t know what it means,” Moore said. “It’s just hard to say at the moment. It really was pretty surprising. I don’t think anyone thought that was coming.”
DDR will turn to an executive search firm to assist in the search for Hurwitz’s replacement. Internal and external candidates will be considered.