DDR Corp to redevelop shopping malls in Puerto Rico

DDR Corp., a real estate investment trust (REIT), has recently announced its plans to redevelop four shopping centers in Puerto Rico as part of its long-term strategy to follow a significant redevelopment program to fuel its growth engine. The projects will be funded with retained cash flow and recycled capital from the continued sale of non-core assets.

The properties that would be redeveloped by DDR include Plaza del Sol – a 676,000 square-foot enclosed mall in Bayamon; Plaza del Norte – a 671,000 square-foot enclosed mall in Hatillo; Rexville Plaza – a 132,309 square-foot retail property in Bayamon; and Plaza Escorial – a 636,415 square-foot shopping center in Carolina.

DDR is expected to invest approximately $50 million for the redevelopment of these assets. The company expects the redevelopment projects to yield a return on investment of over 10%.


At face value an investment of $50 million, is a nice injection of capital into the island. It provides decent job growth for the duration of the redevelopment, which is very much needed. However, while it might be easy to suggest that the investment mean that Puerto Rico is a worthy investment. I used to think that, but I have a new understanding after watching companies pour hundreds of millions of dollars into island properties, only to close them within years. Companies take bigger losses just restating profits, so what's a $50 million write-off, if the investment doesn't work?

Retail investment is a good bet, we're a cash rich island with a tendency to over-consume. So I get it, but on the other hand, maybe it's just plain and simple money laundering. Just kidding, ...not! The Don Dees clan frequents Plaza del Sol often, and it is certainly in need of some maintenance. In the end, I think it's good for Puerto Rico.